If a building loan has not yet been paid in full at the end of the fixed interest period, follow-up financing is required. That means: the homeowner has to renegotiate with the lending bank or find another lender. If you don’t want to give a penny away, you will find suitable financing early on before the interest rate fixation expires. At least three months, better half a year before the end of the fixed interest period, the borrower should receive an offer for the prolongation from his bank and at the same time obtain counteroffers from other lenders for a possible debt rescheduling.
Interest rate comparison is worthwhile
Since the offers on the market may well differ, a comprehensive comparison is required. The building rate calculator determines which borrowing rate you receive for your building finance from a cheap provider. Alternatively, you can request a specific financing proposal under loan application. Both offers are of course non-binding and free of charge.
Is it worth changing the bank for follow-up financing?
With the calculator for follow-up financing, borrowers can calculate whether a change of bank is worthwhile for them. If the lender changes, there are costs for the transfer of the land register and the notary in the amount of a few hundred dollars, but these can be recouped through low-interest follow-up financing. Real estate financing, which is 0.5 percentage points cheaper, can save interest by a few thousand dollars.
You can calculate which additional costs arise from follow-up financing in the land register and notary fees calculator.
Secure early interest rates for follow-up financing
Borrowers should have follow-up financing compared in good time to find a suitable loan with favorable terms. If the fixed interest rate for an existing loan expires, the house bank sends a prolongation offer at least three months before the fixed interest rate expires, which usually has to be accepted within a few weeks. Then the time is often too short to look for cheaper offers and to compare them in peace.
It makes sense to find out at least half a year before the interest rate commitment expires. When interest rates are low, it often makes sense to worry earlier. Because many banks are already offering low interest rates now, even if follow-up financing is only called up in six months or a year. Even with an even longer lead time, you can take advantage of cheap offers via so-called forward loans.
Attractive terms for follow-up financing
Banks often have good offers when it comes to follow-up financing. Because homeowners have proven their creditworthiness by regular repayment of the installments since the completion of their first financing. They may also have higher incomes and greater financial leeway than years before the first loan was taken out.
A high repayment is recommended
A high repayment is particularly important for follow-up financing. Now borrowers should set the course for their freedom from debt. You should keep your monthly rate as low as possible, or – better yet – set it high so that you can repay your remaining debt faster. Since there is often a greater financial leeway compared to the time of initial financing, a higher rate of follow-up financing is also feasible for many.
Debt rescheduling before the end of the fixed rate period
A house or apartment loan can also be redeemed before the end of the interest rate fixation with an early repayment if the borrower wants to switch to another bank with better conditions. After 10 years, this is possible at any time by observing the notice period. If you want to replace that before, you have to pay a prepayment penalty. Since the level of interest five or ten years ago was still significantly above the current best rates, many consumers can save with a new loan agreement.