Building loan: thanks to low interest rates for a cheap home?

Interest rates for real estate financing and construction loans are once again at an all-time low. The times for builders and future homeowners could hardly be better. So if you are now playing with the idea of ​​finally fulfilling the dream of a longed-for home, you have the chance now with the help of a suitable building loan to get into your own four walls as cheaply as never before. The loan interest due for construction loans still depends on the creditworthiness of the individual consumer, but is generally at a significantly lower level than the interest for normal installment loans. However, the low interest rates on home loans are not the only decisive factor on the way to the perfect home loan. We explain what future builders should look out for when taking out a building loan …

Since construction loans or real estate financing are usually concluded with very large sums of money and a long loan term, consumers should not approach the signing of the contract for real estate financing in a hurry. Because despite the low interest rate level, the costs that can arise as a consumer if the financing is wrong are unfortunately usually very extensive and expensive.


Note the repayment amount and fixed interest rates

Before the different interest rate levels of the providers are compared with each other or a special offer for a building loan is obtained, you as a future homeowner should determine exactly which financing framework is required for the construction or purchase of the property. In addition, before looking for the right construction loan, you should calculate exactly what amount can be paid monthly to repay the loan. The amount of the monthly repayment rate is decisive for the term of the construction loan and consequently for the amount of the total loan costs that are due to the borrower until the loan has been repaid in full.


Secure a long-term low interest rate on the building loan

loan term

In order to have a certain calculation option as a borrower despite the very long loan terms for construction loans, the interest due on the construction loan is usually fixed over a certain period. With this so-called fixed interest rate or fixed interest rate, the interest rate that was valid when the market rate was signed will be fixed for a period of up to 30 years. Particularly in the current low interest rate phase, it is worthwhile to agree on a long fixed interest rate with the bank, because should interest rates rise during the fixed interest rate, which is likely to happen in times of low market interest rates, the fixed interest rate will still be paid to the fixed interest rate on the loan,


Our conclusion

It is undisputed that in times of low interest rates, the topic of building your own home or buying a property seems to be worthwhile. But in addition to the points we mentioned, which should be considered with a construction loan, you should also get detailed advice in your plans from independent specialists for construction finance. The topic of building finance is complex and can lead to serious – in other words: years of burdens!