For many property owners, the fixed interest rate on their loan ends after ten or fifteen years - a crucial time to think about the right follow-up financing. A clever choice can often save several thousand euros, while at the same time offering new financial options. This article shows what owners should pay attention to in order to secure the best conditions.
What is follow-up financing?
When the fixed interest rate on a real estate loan expires, there is usually still a residual debt. This must either be continued with new financing or paid off in one lump sum. As many owners are unable to repay the loan all at once, follow-up financing comes into play. Depending on the market situation, this offers the opportunity to benefit from better interest rates or to adjust the repayment installment individually.
Keep an eye on interest rates: The right time counts
The development of interest rates on the market plays a decisive role in follow-up financing. If you act early and compare the conditions, you can secure a favorable interest rate for the coming years. In times of low interest rates, it can be worthwhile taking out a forward loan several years before the fixed interest rate expires. This allows the current interest rate to be fixed for the future, providing long-term planning security.
What options do owners have?
Prolongation (extension with the previous lender)Many banks offer their customers an extension of the existing loan. This is convenient as no new contract negotiations are necessary. However, it is worth comparing other offers, as your own bank does not always offer the best conditions.
Debt rescheduling (change of bank)If you want to secure better conditions, you can continue the loan with another bank. The remaining debt is then taken over by the new bank. Although there are small costs for transferring the land charge, these are often quickly offset by the better interest conditions.
Forward loanWith a forward loan, the interest rate for follow-up financing can be fixed up to five years in advance. This is particularly advantageous in phases of rising interest rates, as owners can secure favorable conditions in the long term.
Adjust repayment rate and term
Follow-up financing is also an opportunity to adjust the terms of the loan to the current life situation. Owners can decide whether to choose a higher repayment rate to pay off the loan more quickly or a longer term to have more financial flexibility each month.
What mistakes should be avoided?
Taking care of follow-up financing too late: Owners should obtain offers one to two years before the fixed interest rate expires to avoid being under time pressure.
Accept the best offer: A comparison of banks is worthwhile - better conditions can often be achieved through debt restructuring or negotiations.
Lack of flexibility with repayments: Anyone opting for follow-up financing should check whether unscheduled repayments are possible. These can help to pay off the loan more quickly and save interest costs.
Conclusion
Well thought-out follow-up financing can bring owners considerable financial benefits. Early planning, comparing different offers and strategically adjusting repayment installments can save costs in the long term. If you are well informed and prepared for rising interest rates, you can secure favorable conditions and ensure financial stability.
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