“Generally speaking, borrowers are benefiting from the current inflation. While the nominal amount of the loan stays the same, the money becomes worth less – making it easier to repay the loan,” explains Herwig Miklinchairman of the WK specialist group of financial service providers.
Expert: “Currently very good interest rates”
People considering a loan should consider a few things. “First you have to consider the nature of the interest rate being set. The advantage of a long-term fixed interest rate is that you are also protected against inflation-related interest rate increases in the long term,” explains the financial expert. In contrast, with a variable interest rate, inflation-related interest rate increases can affect lending rates relatively quickly. “I would recommend homeowners to have a long-term fixed interest rate of 15, 20 or more years. In this way, the currently very good interest rate level can be secured in the long term,” says Miklin. The financial professional also has a tip for real estate buyers: “Loans should now be secured. In general, we expect interest rates for mortgage lending to rise by 0.25 to 0.5 percentage points this year. But even with a slight increase, the conditions are still excellent.”
“Look closely”
If you already have an ongoing loan, you should calculate debt restructuring in advance. “The savings from the lower interest rates must be greater than the costs incurred by the debt restructuring,” confirms Miklin and advises taking a closer look: “Because of the change in the land register or the possible penalties, the debt restructuring will incur additional costs. The point here is to calculate which variant performs better in the end […].“
Herwig Miklin, chairman of the WK specialist group of financial service providers
© WKK / studiohorst
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