End low interest rates? – Why buying a home is now worthwhile

Will we soon face the end of low-interest rates? A question many experts are currently asking.

Why buying a home is now worthwhile

This is mainly dependent on the future decisions of the European Central Bank. Because the key interest rates determine the general interest rate development. If the key interest rate falls or rises, this will affect the yields of Bunds and Pfandbriefe, which in turn are decisive for the level of interest rates.

 

The possible end of the ECB purchase program?

<strong>Possible end of the ECB purchase program?</strong>

It is currently being talked about the return of inflation. Because according to a survey among leading economists, German government bonds could soon face an interest rate jump. The European Central Bank intends to reduce its monthly bond purchases from April 2017. Many observers see this as the beginning of the end of the controversial purchase program. A rise in interest rates to 0.6 percent for ten-year German government bonds seems possible.

Why buying a home is now worthwhile

Looking at the long-term interest rate trend, the current interest rates are still very low. As long as the ECB continues to keep interest rates and the purchase program unchanged, it is likely that mortgage rates will remain low. Deciding on long-term interest-rate mortgage lending now can save you a lot of money over the years.

Other reasons why buying a home is worthwhile:

<strong>Other reasons why buying a home is worthwhile:</strong>

1. Protection against inflation

If your homeowner’s value increases, your property is protected against inflation. The financing costs, however, remain constant over many years, if you commit your interest for a long time.

2. Pensions

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A home is part of the private pension. You have more of your pension if you do not have to pay rent in your old age and your property is paid by the age of retirement.

3. State funding

The state supports builders and modernizers in the form of low-interest loans and subsidies. For builders, there are sources of funding, for example via the KfW. We are happy to assist in choosing the right payday loan consolidation option- PDL Helpers. Further information on KfW funding can be found here.

4. Financial discipline

Studies show that homeowners have more assets than tenants when they retire. Because of the monthly repayment rate, real estate owners usually spend less on consumption and use available funds for special repayments. On the other hand, comparatively few tenants manage to consistently pursue savings plans over many years. Apparently, the distant goal of retirement provision offers less incentive to save than the quick debt relief of the home.

There are many reasons that speak for your own property. In addition to favorable interest rates, other factors must be taken into account so that the financing is optimally tailored to your needs.

Expiry of a construction financing

You would like to know more about the progress of mortgage lending? What you have to consider, we have put together in our checklist expiration real estate purchase and financing for you.