Which brings a high repayment

500,000 euros for a house, almost entirely on credit, for a low rate? Some people start dreaming, but loans also need to be paid off: It’s worth taking a look at this adjustment screw to save tens of thousands of euros.

Ein a house for 500,000 euros, financed almost entirely on credit, for only 1300 euros credit rate per month? There is, and some will weaken. The problem with this: the loan would only be paid off after 37 years. And since pensioners with incomes that are no longer so lavish should no longer pay off building loans, such loans are out of the question for over 30-year-olds.

At least three percent repayment

How can that be? In our sample calculation, one of the most important adjustment screws of a construction loan was turned – the amount of the repayment. If it is set low enough, then each monthly payment will eventually become extremely tempting, but unfortunately the term will become longer and longer. The example assumes a two percent repayment per year. “I would currently recommend at least three percent,” says Harald Schanz, a specialist in construction financing at the credit broker Dr. Small. “Then the property will be paid off in about 30 years, and it shouldn’t take any longer.” What is meant is the so-called initial repayment at the beginning of the loan agreement, because the repayment portion increases steadily over the years with the same monthly rate. In return, the interest portion shrinks because the remaining debt that still has to be paid off continues to fall. With three percent repayment, the interest expense would have been EUR 43,000 lower (see grafic).