Low mortgage rates are not just a dream. To extend the repayment of many loans well into retirement age.
“Come to the winner,” the finance broker praises Interhyp on its website and presents a cute little slide rule, which is to pave the way out of the apartment for rent to own home: “You can afford it!” At 1000 Euro rent Interhyp promises 306,123 euros, Bargeld, in 1400 euro rent there are a whopping 428,572 euros as a loan. A fool, whoever still rented so discreetly gave glad tidings of the financial broker.
A fool who takes these loans totals literally. For the assumptions underlying Interhyp puts its digital toys, are refreshingly sale Orientation: The interested party has abundant capital, has only a first mortgage and is especially young. So young that he has removed with an initial repayment of 2 percent until his retirement all debts. But today only provide borrowers who are younger than 35th.
All older grope with the totals from the digital slide rule in a case that presents them as low-interest rates. Namely, the fact is that the repayment of a loan the longer it takes, the lower the interest rate is. And at extremely low-interest rates it lasts – with the same repayment rate mind you – extremely long: What will take another 17 years and 11 months at an interest rate of 10 percent, dragging himself at an interest rate of 1.5 percent already 37 years and 4 months out.
Cheap loans have a cloven hoof
The currently very low-cost loans actually have a drawback: They tempted by excessive debt and too low repayment. And both ends with incredibly long maturities of loans and significant interest rate risks for borrowers at the end of the fixed interest rate. Property developers should, therefore, calculate from the start with higher repayment rates today. Experts recommend to orient at the beginning of the pension. No later than that date should, for example, the Stiftung Warentest, the debt be repaid.
Sometimes they err experts. Helmut Keller, author and debt counselor who has written on the Internet for “Gabler Wirtschaftslexikon” the keyword annuity is transferred from the current mortgage rates of error. The life of a loan writes Keller, “is at an initial repayment of 1 percent, depending on the interest rate and principal accounting 30-40 years.” Not really: The correct procedure would have been to go from 30 to 70 years.
In fact, it takes on a loan interest rate and an initial repayment of one percent, almost 70 years for a mortgage loan is paid off. Seventy! Or it takes exactly 55 years if the agreed interest rate is two percent and is also repaid only one percent. No doubt: Who expects a percent early repayment today, calculates its ruin. Only after more than four percent loan interest rate, the repayment period decreases 40 years under the noted Keller. You can twist and turn as you want, the lower the interest rates, the longer it takes to repay the debt.