We have tried out a building interest calculator for you, with which you can calculate building interest, monthly payment and total costs of your real estate financing. Getty Images
Anyone who wants to buy a property is advised by various sources to do so straight away.
This is due to the currently lower building interest rates and lower real estate prices. The European Central Bank (ECB)’s key interest rate is currently 4.5 percent.
We have tried out a building interest calculator for you, with which you can calculate the building interest, monthly rate and total costs of your financing.
One man’s joy is another man’s sorrow: nowhere does this truism apply better than when it comes to interest rates. Low interest rates are bad for savers: When interest rates fall, savers receive less interest on their current and fixed-term deposits with banks.
But they are all the better for borrowers: falling interest rates also mean lower costs for taking out loans. Anyone who currently wants to buy a property in Germany or is thinking about it will benefit from a comparatively low building interest rate. The top interest rates for real estate loans are currently between 3.35 and 3.71 percent.
The building interest: an example calculation
We have looked at the current building interest rates for you in an example calculation. At the portal Dr. The numbers were calculated based on the conditions of their approximately 700 banking partners. According to the calculations, the top interest rate there on March 11, 2024 is 3.31 percent. We have it over the Calculator from Dr. Small tried out. For an invoice, you need, among other things, the value of the property and your loan amount – i.e. the amount of money that your lender makes available to you as a borrower.
For the example calculation you also have to select your fixed interest rate and repayment. The fixed interest rate is a fixed interest rate contract for your loan or building financing. For example, if you take out a home loan with a fixed interest rate of ten years, the interest rate will remain the same during this time. This means that you know exactly how much interest you are paying each month without it changing. This gives you security, but after the ten years the interest rate could change depending on the situation on the financial market.
We expected the following data:
Property value: 310,000 euros Loan contribution: 255,000 euros Fixed interest rate: 15 years Initial repayment rate: One percent Monthly repayment rate: 965 euros
With this data, the results start to show Interest rate and annual rate as follows:
The building interest calculator from Dr. Klein drklein.de/bauzinsen-rechner
According to this calculation, the time until the loan is paid off at the same interest rate is 42 years and 8 months. The annual interest rate is 3.62 percent.
Michael Neumann, CEO of Dr. Klein AG: “Interest rates will move sideways for the foreseeable future. In my opinion, waiting for a downward trend here is not advisable.”
At the same time, rents would continue to rise and the demand for property would increase. “And since demand is known to determine the price, I expect real estate prices to rise again soon,” says Neumann. In summary, now is a good time to buy a property, says Neumann.
Low interest rates and price declines
Data from other real estate portals also seem to prove him right. According to a recent Data collection from Immowelt Apartment prices, i.e. the price per square meter, are also 11 percent cheaper than at the peak of the real estate boom in May 2022.
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According to Immowelt data, the highest percentage price declines are in Hanover (minus 21 percent), Frankfurt am Main (minus 19 percent) and Stuttgart (minus 17 percent). The prices were measured for condominiums each with an average of 75 square meters, three rooms, on the 1st floor, built in the 1990s.
Berlin, on the other hand, has recorded the smallest decline in this comparison: prices there are said to have only fallen by five percent since July 2022 – which could indicate continued demand and population growth.
Disclaimer: Stocks and other investments generally involve risk. A total loss of the capital invested cannot be ruled out. The articles, data and forecasts published are not a solicitation to buy or sell securities or rights. They also do not replace professional advice.
This article appeared on March 11, 2024 and was updated on March 12, 2024.