Many austrians own a property and would like to spruce it up after years, or simply beautify it. A home loan is the ideal form of financing here. And in times of low interest rates often cheaper than you think. But again, compare carefully before deciding on a home loan.
Installment loan, mortgage loan, car loan. Many types of financing are familiar to us from our everyday lives. But a home loan – what is it really??
With the right home loan to own home
Basically nothing more than a special purpose installment loan, with fixed monthly installment payments. A home loan is earmarked for specific uses. Mostly for projects and changes in or at the own house, or the own apartment. For example, an extension or roof, the new winter garden, a bathroom renovation. For this, a low-cost flexible home loan is ideal.
The decisive advantage over a conventional mortgage loan: a home loan does not require any complex and usually expensive mortgage collateralization with a bank and a notary public. Agree loan amount and term, access online, done.
The low-cost alternative to installment loans
Thus, the special home loan in austria is increasingly used as an alternative to the classic installment or consumer loan. He offers property owners an uncomplicated and fast form of financing – at extremely favorable interest rates. Home loans are usually available from banks in austria for sums starting at 5.000 € up to 100.000 €. Depending on financing requirements. The terms are usually flexible and can be negotiated with the bank.
How much housing credit do i need and can i afford?
Before you decide on a home loan, the amount of the loan should be clarified first of all. And also the possible monthly credit installment, which the household cash gives. This ultimately determines the maximum amount of the home loan, as well as the interest rate and, of course, the term of the loan. Important when comparing interest rates: does the loan offered have a fixed interest rate, or does it have a variable interest rate? If the bank offers you a variable home loan, you should be aware that the current low interest rates here can be raised at any time if, contrary to expectations, prime and market rates do rise in the foreseeable future.
Furthermore, you should pay attention to how high the margin – i.E. The bank's markup – is on the contractually agreed reference interest rate, for example euribor. You can usually negotiate this yourself with the bank of your choice.
Without comparison it can be expensive
Interest, expenses and co.The cost differences on the market for home loans are also considerable. Usually the house bank around the corner is not the most favorable financing partner here. With modern direct banks, a home loan is usually available free of charge and at much lower interest rates. A crucial point here, however, is also your creditworthiness. If the credit is good because of good household income or debt-free real estate ownership, interest rates and costs for a home loan drop noticeably. So compare and check the respective offers for home loans carefully before you rush to take out a loan. Already in the case of a home loan of over 50.000 euros, this can save you several hundred or even thousand euros over the years.
Tip: a home loan calculator will help you compare home loans – quickly, securely and completely free of charge.
Often forgotten: the incidental costs
What matters is what a home loan actually ends up costing you per month. Interest rates are only a part of this, and are now very low. Processing fees, credit fees and possible additional insurance should not be underestimated in any case. Only recently, the austrian supreme court ruled that processing fees are permissible in principle. And many banks find this very convenient to make a real business out of their loans. By the way, the home loan from direct banks from the internet almost always comes without fees and additional charges.
So before signing a contract, be sure to get the effective interest rate and the exact monthly loan payment – credit rating, expenses and fees included.
Correct term and special repayment
Every bank now offers a home loan. Many banks even offer special conditions for a home loan (e.G., a mortgage). Another crucial point here: the term of maturity. First, it affects interest rate and service charges. Secondly, you must actually be able to reliably raise the monthly loan charges over the agreed term. With a proper term for your home loan, you'll find the ideal balance of monthly expense and actual total charge on your loan.
Anyone who wants to renovate a house should plan financially right from the start.
What else you should definitely look out for: does the bank offer you the option of an annual special repayment or even the chance to repay the home loan in one fell swoop – and free of charge??
With direct banks, you can repay a fixed sum at least once a year in addition as a special repayment. In most cases, this is even possible several times a year a special repayment. Of course, an early full repayment of the home loan is even better. Many banks allow this, often even without additional interest or charges for late payment.
All this you should definitely agree on in the loan agreement. Because each unscheduled repayment reduces your residual burden and the credit period for the home loan enormously in one fell swoop. They are faster debt free and save a lot of money.