Do you currently or in the near future intend to buy or build a property? Then you are certainly interested in the current mortgage rates as well as the construction interest rate development for the year 2018. Finally, the construction interest rates and their forecast are a decisive factor for the conditions at which you can take out a loan and how favorable or expensive the real estate loan will thus be for you.
Current interest rate/key ECB rate
How high the construction interest rates and their development are in 2018 depends primarily on the general interest rate level, which is set by the European Central Bank (ECB) with the prime rate. The ECB is currently pursuing a zero interest rate policy. This means that the prime rate is at 0.00 percent. This also affects the level of interest rates: These are currently lower than ever before. Such a low level of interest rates is supposed to boost the economy. The aim is for investors to make more investments again, for example by taking out construction loans with banks and spending them on real estate. Regardless of the loan amount as well as fixed interest rate, you have to spend much less money to repay a real estate loan with the current monetary policy. You pay this back in the form of installments to the respective credit institution.
Conclusion: The general interest rate level is based on the given key interest rate of the ECB. Banks grant real estate loans at the prevailing market interest rates. Because interest rates do not remain constant, but can change at any time, the time at which you conclude a real estate financing is decisive for how much the loan will cost you. Therefore, always keep an eye on the development of construction interest rates, also in order to secure favorable follow-up financing.
Construction interest rates – development 2018 – a forecast
The advice of the ECB came only on 25.01.Meet in 2018 for the last time to decide the level of the key interest rate again. It was agreed to leave this at the record low of 0.00 percent. Thus, experts assume that they will maintain their level in 2018 and that there will be a slow increase in interest rates thereafter. Even if the president of the central bank, Mario Draghi, is satisfied with the economic development of the euro zone according to recent statements and plans to reduce bond purchases at the beginning of 2018, an increase in the key interest rate is not expected for the time being. This means that as long as the prime rate remains this low, consumers can expect mortgage rates not to skyrocket. This is because banks can obtain money cheaply and pass on these favorable conditions to their customers.
A decisive factor in financing is that you lock in favorable interest rates for as long as possible. You should therefore tend to choose long terms, such as 10, 15 or even 20 years, in order to secure the lucrative conditions for as long as possible. For optimal planning security of your construction financing over a long period of time, you can use the practical online interest calculator at your 1822direkt. With this you have the possibility to calculate the interest rate for your real estate loan for different loan amounts, different equity ratios as well as flexible maturities. In this way, you can make a comparison and select the best offer for you individually.
Construction interest rate development 2018 – What can consumers use as a guide??
Even though the ECB sets the key interest rate and this influences the interest rates for real estate loans, banks still have individual margins. Consumers can see how construction financing rates are evolving by looking at the following indicators:
How is this related? Banks partially refinance their customers' construction financing via the Pfandbriefe. In order for as many investors as possible to make their financial resources available to the banks, the banks must offer investors better conditions than they would get with government bonds. Therefore, the credit institutions are guided by the interest rates and yields of German government bonds.
How does the construction interest development 2018 affect the real estate prices?
The low construction interest rates not only enable favorable real estate financing. At the same time they bring another effect. In times when real estate is cheap to obtain, demand for it increases. The lower the interest rates, the higher the loans that borrowers can afford with the same monthly burden. Investing in real estate is then particularly lucrative. At the same time, investments such as call money or time deposits are less interesting because they yield low returns at low interest rates. For the same reason, more consumers tend to invest in real estate. However, as demand increases, so do prices. This is particularly true of real estate prices in Germany's major cities. In addition to the general interest rate trend, you should therefore always keep an eye on real estate prices and include them in your financial planning.