Loan total rises to record high, standard rate extremely low
On average, borrowers raised USD 248,000 in April to finance their property – an increase of USD 5,000 for the second month in a row. As a result, the loan amount rises again to an all-time high. This is made possible for many by the extremely low interest rates, which are reflected in the standard rate . The rate is calculated for a loan of 150,000 dollars with two percent repayment and 80 percent mortgage lending. In April, it sinks to an almost historic low: at 426 dollars, it is only around 1.7 percent or 7 dollars above the all-time low in October 2016.
A lot of equity, mortgage lending increases slightly
Despite the high level of loans, property buyers and house builders still bring a lot of equity into the financing: 16.19 percent of the purchase price, in addition to the incidental acquisition costs. Conversely, this means a loan-to-value ratio of 83.81 percent – 0.46 percentage points more than in the previous month.
Data speak for stable financing
Real estate buyers use the very good mortgage lending terms both for a high initial repayment and for a long fixed interest rate . The initial repayment increased slightly compared to March (plus 0.03 percentage points) and again reached the high level of February at 2.83 percent. The average fixed interest rate is 13 years and 10 months. That is four months less than in March, but the period is still long. For comparison: throughout 2017 the average fixed interest rate was lower.
Both – a high repayment and a long fixed interest rate – help borrowers to pay off their loans quickly and safely: thanks to the high repayment, they quickly reduce their liabilities to the bank. The fixed interest rate creates planning security and also ensures that a relatively large proportion of the loan is paid off before the follow-up financing is due. Because then only a small amount has to be taken up, the conditions for the connection are more favorable.
Hardly interested in forward loans
The low interest rates are currently not moving property buyers to secure them against a premium for the future: Interest in forward loans has never been so low. Only seven out of 100 dollars of mortgage lending in April are attributable to this type of loan, a new low. Regular annuity loans, on the other hand, remain popular: their share is 83.89 percent – 0.88 percentage points more than in the previous month.
KfW loans also play a larger role again. If they were still below four percent from May last year up to and including January, their share has been higher since then and climbed to 4.73 percent in April – an increase of eight percent compared to March.