If you are planning to build or buy a house, then a solid housing finance is indispensable and very important.Unfortunately housing loans are often concluded with too little equity, which can cause considerable problems later when repaying the loan.
Compare construction financing offers in Austria – get free quotes
So that you do not meet the same fate, they should, in order to be able to conclude a solid, well planned and effective housing finance, have sufficient equity capital. The necessary equity can be obtained, for example, with a plot of land, cash or but a muscle mortgage.
Every year, many Austrians fulfill the dream of owning their own home. Only a fraction of them can pay for their own home out of petty cash. Without building loan or other types of home financing does not work.
But which is the best type of financing? And what to look for when choosing? In our large advisor approximately around the topic house financing you receive many valuable Tipps, how you can realize your dream.
- The economic crisis has led to a change in thinking: Instead of investing or saving the money, people prefer to invest in something tangible. Real estate is considered a safe form of investment with the prospect of appreciation in value.
- The trend toward home ownership is clearly making itself felt in the real estate market.
- The prices of condominiums and houses are rising by many percent each year, as are land prices. Instead of buying an existing house, many therefore decide to build a new home right away. But how to finance?
The popular classic: the building society loan
The most traditional and most popular variant of the house building financing is and remains the building society loan. Due to the fact that a building loan is a popular gift from parents or grandparents to their offspring, many of the future home builders have a good starting position already at a young age.
Compared to other savings products, building savings in itself has the great advantage of a much better interest rate. In 2015, on average approx. 3 % possible, which is very generous compared to the low prime rate. A building savings contract is usually tied up for at least six years. In addition to the interest rate, one receives for each year of saving a state subsidy, which depending on the building society can be between 1.5 and 4%, a maximum of per year 1.2000 € possible. If the building savings contract is terminated early, however, the building savings premium must be repaid.
If the building savings contract has expired, it is possible to take out a building savings loan with relatively favorable conditions. No bauspar loan will be approved without a previous bauspar contract. The loan does not have to be taken out directly afterwards.
Currently, the four most popular building societies in Austria offer interest rates of between 2.25% and 2.875% for a building loan.
The leading building societies are:
- Raiffeisen Bausparkasse,
- the Wustenroth Bausparkasse,
- the S-Bausparkasse and
- ABV Allgemeine Bausparkasse.
If you do not yet have a building savings contract and want to build in the future, it is worthwhile in any case to take out a building savings contract and, if necessary, postpone the construction until later. The contract period passes quickly and in the meantime you can plan well, so you can start building right away. It is important to compare the current models of bauspar contracts with each other. Due to the different interest rates you can get a lot out of it.
The misunderstood spectre: the mortgage
Many builders do not want and can not postpone the construction project. The money must come now. For them, the mortgage is a sensible option. However, a mortgage is fraught with prejudice, which is why many exclude these forms of financing from the outset. The mortgage is a lien on real property, the credit institution is entered in the land register. Many confuse this with the surrender of ownership rights. But in fact, with a mortgage you remain the owner of the property. Only in the event of bankruptcy does the property become the property of the bank.
Otherwise, a mortgage loan works like a loan. The credit institution provides the money for the house construction and the borrower pays back the amount in monthly installments. Per month, the installment may not exceed 35% of gross income. Another condition for borrowing money is that the homebuilder bears 20% of the value of the property itself.
A mortgage usually runs for 10 years, with two options to choose from:
– Fixed-rate mortgages and
– variable mortgages.
The fixed-rate mortgage can be planned best. When taking out the mortgage, a fixed interest rate is agreed, which applies until the end of the term. With variable construction financing, the interest rates adjust to the current interest rates. Currently, fixed-rate mortgages are clearly recommended. Interest rates are lower in 2015 than ever before. You can only increase, which would be disadvantageous for construction financing.
The solid financing: The housing loan
Even for a housing loan, which can be taken out without a prior building savings contract, a fixed interest rate is currently recommended. As the name suggests, the construction loan is tied to a specific purpose, namely the construction, expansion or renovation of residential space. The prerequisite for a housing loan is that the borrower can bear at least 20% of the construction price itself. In addition, the monthly installments for repayment may not exceed 45% of gross income, although this varies depending on the lender.
As with no other form of financing, you should definitely compare the options with a home loan. This is not so simple. Never base your decision solely on the effective interest rate for the loan. AK Austria warns against this, as the promised conditions often do not correspond to those when the contract was concluded. Many credit institutions still add various fees, so you have to pay more than originally assumed. With a term of at least 10 years, this makes a difference of several thousand euros in the end.
Depending on the financial starting position, a partial amortization loan is recommended. The sooner the loan can be repaid, the better. With many loans for real estate, however, adherence to the term is mandatory, and early repayment is subject to fees. The lender demands financial compensation for the lost interest income, which can be hefty. With a partial repayment loan, you can pay off the loan amount in advance completely without any expenses.
Step by step to favorable construction financing
Planning the financing of a house is just as complex as planning the construction itself. Take enough time and compare carefully, after all it is your money.
1. The initial financial situation:
Before you even start looking, you need to be clear about your own financial situation. Obtain a self-assessment of your creditworthiness from the credit protection association. Then you should find out how much money you can currently spend by adding up your account balances and your savings. However, do not plan for the entire sum when financing construction. A financial buffer for emergencies or. Special expenditures, such as z. B. a car purchase, vacation, bridging unemployment, etc., should absolutely remain. The same applies to the monthly installments you can afford to pay. As recommended by the banks, you should plan between 35 and a maximum of 45% for the installments. Only if you can easily cover the running costs with the remaining money, you are ready for the construction financing.
Do not use only the income and expenses of the last few months for the calculation, but choose as long a period as possible. The more comparative values, the more meaningful the average is.
2. The research
Now comes the most time-consuming part – comparing the offers. Before you start comparing, you should be clear about your options. With home financing.at and similar advisors to the house financing receive you many interesting Tipps in addition.
Don't forget to also find out about the subsidy options at the same time. In addition to the state, the state and not least your bank advisor, your municipality is also an important point of contact. Especially the use of renewable energies is often promoted regionally.
In order to make a decision on the type of financing for real estate, it is advisable to answer the following questions for yourself:
- How much money will I need to build a house?
- How much savings I can contribute directly?
- How high can the monthly installments be maximum?
- Do I perceive a mortgage as burdensome?
- Is there a possibility of early repayment??
- What are the options for follow-up financing?
- Can I skip payments in case of emergency?
- Can I trust my bank or. I feel understood by my bank advisor?
- Are there tax advantages?
However, it is recommended that you do not commit yourself to one bank, but obtain offers from various credit institutions. The better you prepare in advance for the consultation, the better arguments you can present and the faster the contract negotiations will be completed.
A precise quantification of the expected expenses and an unsolicited presentation of your financial possibilities strengthens your credit rating.
You can recognize a good bank advisor, among other things, by the fact that at the same time as the financing options, he will also provide you with information about the subsidy options, e.g. B. for the use of renewable energy, can provide. A clear answer to your questions is also a good sign. Especially with regard to the conditions you should inform yourself well. If the consultant answers evasively or does not give any clear answers, you should become alert. Apart from whether the interest rates are flexible or fixed, you should also clarify how high the interest rate will actually be when the contract is concluded, whether there is a possibility of early repayment and, if so, what costs will be incurred for this, etc.
The direct bank as a construction financier
Those who already have experience with borrowing should also consider an online construction loan. Online banks usually offer even better interest rates than branch banks. The fees for account management are also lower. In addition, you have the advantage that a loan with immediate commitment is possible. You will be informed within a few days whether the loan will be granted or not. However, due to the lack of personal advice you are on your own. Only those who are aware of the pitfalls of a loan agreement and have informed themselves in detail on the Internet and at the consumer protection agency should consider this option.
Muscle mortgage means that the builder, a part of the housing finance, with personal contribution, ie he makes the interior work itself, such as laying the floor or wallpaper, etc. While it always depends on the planned project, the rule of thumb is that you should choose approx. 20-25% of the equity capital should raise with the housing financing, because the more highly the equity capital is, the more easily, faster and surely the financing can go off.
The other half of the housing finance is then usually settled, either by a mortgage loan or a building society loan. If you want to use a home savings loan to finance your home construction, you must ensure that the home savings contract has been in place for at least 3 years and that you have paid into it regularly, otherwise the home savings contract will not be ready for allocation. On the basis of this allotment maturity, the time is then also determined, which then finally provides the Bausparer with a low-interest loan. For residential construction financing, at least 20 to 30% should be contributed by the building society loan.
Annuity subsidy financing in housing finance in Austria
As it is early resp. In the middle of the 90. years there were acute liquidity bottlenecks in Austria, residential construction financing was changed over to object-related annuity subsidies for new construction. In the case of new buildings, the annuity subsidies have been guaranteed for up to 20 years and longer. This showed that the annuity subsidies as an instrument, especially on the capital market interest rates very efficiently could be used read.
Another system can be found in the subject-related annuity subsidy, which is used, among other things, as a "super subsidy". With these housing finance grants, they are determined and set annually based on income. Grant terms can be modified depending on income limits, but there is no legal right to this housing financing.
Is there a good alternative to housing finance Austria?
There is a good example from Upper Austria, which could perhaps also be used elsewhere, namely the housing subsidy. This is suitable for all those who would like to buy, renovate or build a house, but do not have the so-called "necessary small change".
The housing subsidy Upper Austria thus allows even people with a small purse to realize your dreams and quickly and easily.
The principle is very simple, because with the housing subsidy Upper Austria, jumps the province financially for you and takes over up to 90 percent of the costs incurred, if equal the house then first of all, into the possession of the respective province passes and this represents a disadvantage for one or the other, is with this principle it finally possible to start and realize with little equity his desire building project.
A great advantage is that you then, by paying the rent directly to the housing subsidy Upper Austria, that your house, with each payment, a little bit more into your possession and sometime then belongs entirely to you and with little effort. All in all, a good alternative for all who would otherwise have no chance to ever move into their own home. The housing subsidy is also possible in other parts of Austria > here you should inform yourself in advance!
Advantages of a building loan calculator
The building loan calculator is mainly used when it comes to calculating how expensive a building loan will be on balance. It should be noted that the term and also the amount of the loan are considered in any case. In principle with a longer running time also a higher cost factor is to be expected. With regard to interest rates, it should be noted that in principle the lower interest rates are paid precisely when a building loan is concluded for a shorter period of time.
Quick and easy comparison of real estate financing
A building loan calculator makes it possible to compare different terms and interest rates within seconds. In addition, it should be mentioned that the use of such a construction loan calculator is in any case often free of charge. Thus, the calculator can be tried and used very often.
Who wants to check many records and also alternative offers may calculate through, which should use the construction loan calculator in any case frequently and perhaps even save the link to the calculator. In many cases, the construction loan calculator is a small tool that can be opened and used directly in the browser. It should be noted that it may also be possible that the construction loan calculator can be downloaded as software and must be installed.
This has the advantage that individual records can be saved directly and can therefore be used longer. Who would like to save different calculations and calculate later, this can also be done without problems via a building loan calculator. It should be noted that the quality is right.
Partly it is possible that with a good software in the segment building loan calculator directly also individual calculations can be set up and represented in parallel. This is especially recommended if a direct comparison is to be exercised. A printout helps if the offers are also to be discussed with other people, which is extremely practical and can have many other advantages.
Building loans – tips on construction financing in Austria
A construction loan is used for construction financing, so it is necessary that a property or mortgage is registered as land charge. Without this basis, a construction loan or a mortgage is not possible. a construction financing is not possible. However, there are also insurance companies that provide a construction loan. With the total financing it is to be made certain that this is granted for the most part by a loan financing. This is secured by the mortgage / land charge. Also the protection by a life insurance, such as a unit-linked life insurance, is a common approach to construction financing.
The advantage of securing through a form of insurance is the tax benefit, the contributions and interest must of course be paid. The sum that is paid out at the end of the term of the life insurance policy (sum insured) is used to repay the mortgage. As another option for construction financing through a construction loan is also the financing with a real estate loan or a foreign currency loan possible.
One can also in the construction financing during the term of a refinancing or. Reschedule the loan, but be aware of the bank's possible demand for an early repayment penalty.
Comparison of construction financing – what to look out for?
After the profound decision to build your own house and no longer be dependent on the possibly stubborn landlord, the question of the right financing of a property quickly arises, because only in the rarest cases, the situation is such that the complete capital for the construction is available.
As a rule, however, it is by no means advisable to rely directly on your own house bank for construction financing, because usually the conditions of the large private banks are not as attractive and inexpensive as some direct banks and sometimes foreign institutions offer.
For this reason it is advisable to call a comparison of financings in the Internet, with which Baufinanzierungen are presented tabular arranged and it is so possible to compare the different conditions clearly and to determine, which offerer fits best to the own life and financial situation.
However, all criteria should be taken into account in the selection process, so that the supposedly favorable loan is not associated with unpleasant surprises. Above all, the minimum equity should not be chosen too low, even if there are some offers that require virtually no equity at all, there should be at least 10 to 20% of the purchase price, so that the financial pressure is not too high.
In addition, it is advisable to find the right financial burden, because otherwise the monthly installment can include so much money that you no longer have enough room to maneuver to even approximately maintain your previous standard of living. As a general statement can be made that monthly interest and repayment should not exceed 40 percent of net income, so that enough money is still available
When comparing, however, should be considered above all two basic criteria, which make a clear statement about how expensive or. favorable the respective financing of the own real estate will be finally. The effective interest rate for the entire construction financing provides information about the actual costs incurred through interest, whereby here, of course, the interest rate should be as low as possible.
In addition, n but also the total costs until the complete repayment of the construction financing should be compared, so the final amount that must be paid to the respective credit institution in the course of the loan period in total. If both parameters are very favorable in the comparison, this can be the first indicator of the appropriate credit.
Of particular interest can also be the flexibility, it is particularly good if free unscheduled repayment rights are included in the loan agreement or a variable repayment rate can be agreed.
As a final aspect, you should also consider the term, which is best made as long as possible, as this ensures a high degree of planning security.
In the search for a favorable loan, you should clarify in advance what form of credit or. Form of financing one desires. For example, a favorable construction financing is associated with other conditions / options than a loan for the car financing. In any case, it is important in the search for a favorable loan to take the time to check the various offers of the credit providers.
Loan offers from the house bank
One way to get a loan is in any case to ask your own house bank about the conditions for financing. Depending on the amount of interest, it is also useful to inquire at several banks.
Use online credit
Another way to find a favorable loan is to compare the various online loans with each other. Many banks now also offer their credit as an online loan. In some cases, these are available with a more favorable interest rate than comparable loans in the respective branches.
Loans from private
One can receive a favorable credit with appropriate credit standing also with private credit market places such as Smava, where credits are assigned by private people. Here it is important to describe the own credit request and the circumstances exactly, so that potential investors / lenders can make themselves a picture.
In any case, when looking for a loan with a favorable effective interest rate, it should be favorable over the entire term of the loan. For example, the possibility of fixed interest rates is a variant that should be considered especially for long-term loans and financing.
How are the construction financing conditions in Austria?
Due to the current economic situation and the resulting fact that the European key interest rate is at a record low, many people are considering whether they should not fulfill the dream of owning their own home.
Above all, the low key interest rate makes loans incredibly cheap at the moment, so that even building loans with a sum of 100.000 euros make up a monthly rate of just 350, – euros to 400, – euros.
But who decides for a construction financing of any kind, should consider the different offers of the enterprises or. Compare companies and also check. Because again and again it is hidden fees in clauses in contracts, which are responsible for the fact that loans suddenly become more expensive or in the end have a higher total amount than seemingly expensive loans.
It depends on different factors
The construction financing is an individual financing, which is specifically tailored to the borrower. Thus, in addition to the age of the borrower, the income is of utmost importance as well as the equity capital, which he must provide before the loan is approved.
Important: own funds for construction financing
Because without own funds it is almost impossible to get a loan at favorable conditions. On average, bauspar loans in Austria, which have a term of 30 years, have an interest rate of between 3 percent and 6 percent. There are however also so-called intermediate loans, which are granted up to the next national promotion for example, which exhibit a somewhat more favorable interest rate.
The interest rates of domestic banks
The Allgemeine Bausparkasse offers a building loan with an interest rate of just 3 percent. Also the Wustenrot is with a percentage of 3.7 per cent one of the most favorable banks within the range financing by means of building savings loan. Raiffeisen is also in the upper middle range of the favorable credit companies with 3 percent. But apart from the Bauspardarlehen is also important, which interests exhibit the intermediate loans, which are likewise often needed.
The Allgemeine Bausparkasse offers the absolute best solution for the customer with an interest rate of 0.90 percent for an interim loan. Wustenrot as well as Raiffeisen charge a percentage rate of 2.250 percent for an interim loan, and are thus significantly more expensive than the building society.
Options for construction financing
Construction financing refers to the financing of a non-moveable item – such as land or a building. It is often also referred to as a building loan or construction loan.
Construction financing usually represents a large part of the financing of home ownership, which is used in addition to the existing equity capital. Building savings contracts or mortgage loans are often used for construction financing. The latter are secured with the so-called real estate lien.
In principle, it makes sense to inform oneself comprehensively in advance about a planned construction financing, in order to benefit, for example, from government subsidies, tax advantages and, last but not least, low financing costs.
Most often, construction financing is concluded in the form of an annuity loan. The annuity loan is repaid in monthly fixed and constant installments, which consist of an interest and a redemption portion. The longer the loan term, the lower the interest portion of the monthly installment, while the repayment portion increases. As a rule, the minimum repayment rate at the beginning of a loan agreement is 1 percent per year – if you are more solvent, you can also choose from the beginning
Agree on a higher redemption share and thus pay off his property faster. The term is thus shortened and the total cost of construction financing is significantly reduced.
Financing with a building savings contract
The second type of construction financing is the building savings contract. In this case, the borrower pays some time into a low-interest savings fund and, after paying in an agreed minimum sum, subsequently receives back twice the savings sum – half of it at a construction loan with a low interest rate.
The building savings contract is worthwhile in the construction financing especially as follow-up financing – as a complete solution
it is often not suitable because in this case the loan must be repaid quickly and this is not financially feasible for most borrowers.
Financing via a life insurance policy
A third type of construction financing through an insurance company represents. With this variant, the borrower only has to pay the accruing interest each month. The actual repayment portion is saved in a life or pension insurance policy and eventually repaid to the bank in one piece. Here, above all, tax aspects come into play.
Which variant is the best, is to be decided in each individual case and depends on the personal conditions and desires.
Since 2002, construction financing can also be subsidized in combination with the Riester pension. With the so-called "Wohnriestern" you take advantage of government subsidies, as the property is traded as a retirement provision.
Construction financing is understood to mean various loans that can be used for the construction of a new house or for renovation work. The loans are in any case earmarked and can be used exclusively for construction and conversion measures.
Borrowers must prove the use of the funds to their bank. When applying for the loan, cost estimates from tradesmen or the architect's approximate cost breakdown can be used for this purpose, for example. Banks also pay close attention to the disbursement of the loan to ensure that the use of funds stated when applying for the loan is also adhered to. Thus the disbursement takes place usually only by presentation of the craftsman calculations or however the confirmation of the building progress, which architect or developer fill out.
What loans are available for construction financing?
For construction financing there are a number of different loans that can be used. The most commonly used loan is the annuity loan, which is sold by many banks, savings banks and financial intermediaries. The annuity loan is thereby characterized by the monthly installment, the annuity. It contains both the interest portion to be paid for the loan and the redemption portion. This repayment portion increases naturally in the course of the time, because the interest load sinks.
This annuity remains constant during the selected period of the fixed interest rate, as does the interest rate. This can be fixed for a period of 5-15 years, depending on the wishes of the borrower. If the fixed interest period has expired, the interest rates for the outstanding balance must be reset. Thus an interest rate change risk arises that borrowers must consider. In order to reduce it, the fixed interest period should be chosen as long as possible in times of low market interest rates.
In case of annuity loans it is also possible to make some special agreements with the bank. Important in this context could be, for example, the unscheduled repayment option, which authorizes borrowers to repay parts of the loan early. The repayment change option can also have a positive effect for borrowers. With this change, the amount of repayment during the term can be adjusted to the financial circumstances. The following applies: an increase in the repayment has a positive effect on the repayment of the loan, because the higher repayment portion immediately reduces the interest portion to be paid.
For builders and renovators it can also be important to pay attention to the duration of the provision. Once the commitment period has expired, borrowers must pay a monthly commitment interest rate of 0.25% per month, which can put a further strain on their already strained financial circumstances. It therefore makes sense to choose a commitment period of at least one year, so that construction delays do not have a negative impact.
In addition to the annuity loan, building society loans are also a good choice for construction financing. In order to be able to use the building savings loan, however, a building savings contract must be in place that has already reached the allocation maturity stage. A building savings contract is ready for allocation when the required minimum contract amount has been paid in and the minimum term has been observed.
By making a one-time payment right at the beginning of the term, it is often possible to reach the allotment maturity after only 24 months. Alternatively, an advance loan from a bank or directly from the building society can be used during this time. For this advance loan only the interest is due, the repayment is made at the end of the term by disbursement of the building loan.
This is so popular particularly because it offers a low interest rate, also it can be special repaid at any time, also the premature repayment of the loan is possible at any time.
Characteristic of all construction financing loans is that as security mortgages on the respective property are registered. Both mortgages and land charges are possible here, whereby the latter have prevailed in practice in recent years.
By registering the land charge, the bank secures the right to sell the house should the borrower no longer be able or willing to meet his loan obligations. In this case, the house is sold at a compulsory auction. The sum obtained in this way is then used to repay the loan, the remaining part is paid to the borrower.
The most important criterion in construction financing is the interest rate that banks charge for granting loans. This interest rate depends on the amount of the loan as well as the term or the interest rate. The duration of the fixed interest rate. The value of the house and the creditworthiness of the borrower also play a role in determining the interest rate, which for some years now has been calculated on the basis of an individual scoring system.
In order to be able to check creditworthiness, borrowers must therefore submit wage and salary statements as well as income tax statements. Provided that the borrower is self-employed, balance sheets and economic evaluations become additionally necessary. In order to be able to evaluate the house individually, the land register excerpt as well as the cadastral map and pictures of the house must be submitted additionally. On the basis of these documents, a mortgage lending value is determined, which serves as the basis for scoring.
In addition to the actual interest rate, borrowers should also consider the other fees and costs for construction financing. In some circumstances, in addition to the processing fees, which amount to 1% of the loan amount, valuation fees are charged. A comparison of loan offers is therefore only possible on the basis of the annual percentage rate of charge, which, however, does not include the valuation fees.
The construction loan is usually taken out to finance their own property with it. It usually does not play a role whether it concerns thereby a complete house, or in addition, only its own dwelling. In principle can be converted by a building loan in the first place naturally own building project into the act. It is possible, for example, to purchase a plot of land and build your own house here.
Ideal as complementary financing for construction projects
The building loan is needed thereby, if it concerns that for example a part of the costs is not present as a savings balance.
In principle it is with many humans the case that a house must be paid off over a credit. This is due to the fact that a house usually costs several hundred thousand euros, which leads to the fact that this sum exceeds the savings of many people. It is important that a construction loan is taken out so that the house can be built earlier, for example, than if the complete house can only be built when the sum has been saved for it.
A building loan is classically taken out directly with a building society, or also with a bank. It is important to specifically examine and compare the individual conditions of the banks. There is an enormous difference in the individual terms, especially with regard to the interest rates, which can usually amount to several percentage points per year and thus ensures that especially with large sums, there is also a significant difference if someone has opted for a lower interest rate.
It is also important in a construction loan to note whether the loan can be suspended in the short term. Who takes up a credit and can no longer repay, or in addition, only over a short period of time can not repay, should have the possibility that he suspends the installment payment for a short time. This is possible with many providers without any problems, but should also be agreed contractually.
Your own house can not always be financed directly from your own pocket. It often happens that a construction loan must be taken out when building a house. Basically, the construction loan can be taken at a bank, or even at a construction lender. Building societies are very often mentioned here, when it comes to a suitable construction loan is found and can be taken up.
Important – compare different financing options
With regard to the costs incurred by a construction loan is to note that such a loan can be built very differently. With some loans of this type, it is possible that the repayment is made in installments. With other credits it is so regulated that after a certain time the complete borrowed sum must be repaid. Most people, however, opt for a construction loan, which must be repaid in the form of fixed installments.
The amount of the installments is the same every month and is determined by the total amount borrowed and the associated interest rate. In principle, usually 1% of the total amount must be repaid with the first installment of the construction loan. Therefore, it should be calculated exactly how high the loan that someone takes out can be. It is also important that the loan is taken out with a building society, or with a bank that offers a good service.
Who is with a bank that is really competent and helpful, can consider themselves lucky. It should be noted that the individual loans run over a long period of usually many years. Over the entire period it should be possible to contact the bank without any problems and also in case of payment problems, a suitable solution should be found together with the bank. It is possible with many banks that a construction loan can be managed via the Internet. Who can call his loan online has the opportunity to see directly what sums have already been repaid and what sums are still open. Thus, the remaining term can be observed quite closely.
Offers for construction financing for private individuals – Austria
With the decision to the purchase or to the building of a real estate the owner meets with the choice of the financing one of the most difficult decisions.
Numerous banks, building societies and financial service providers are available to advise on this. Financial advisor available.
In contrast to construction financing available in Germany, the interest rate on the loan is approx. 40 percent lower interest foreign currency loan. Construction financing Austria.
In this case, the loan is granted either in yen or in Swiss francs.
The interested builder does not have to travel to Austria to apply for financing, but can do so conveniently via the Internet.
Usually a preliminary decision is made within 24 hours.
If the examination turns out provisionally positively, the documents are sent in few days by post office from Austria.
The disbursement of the loan is made in Swiss francs and is converted into euros in the context of crediting the borrower. The effective annual interest rate and the exchange rate to the euro make this loan particularly favorable and therefore attractive for builders. Currently, the interest rate for a loan in Swiss francs is less than 3 percent.
Here, the interest rate is calculated according to the internationally fixed Libor rate for banks.
It should be noted that during the term of the loan only the interest is repaid. The repayment of the total amount is made at the end of the term in the form of a single installment.
The repayment vehicle (the total sum/loan amount) is formed within the term, and can consist of a one-time investment amount or of monthly savings on life and pension insurance policies or a savings contract. In recent years, the forms of investment have generated an average interest rate of 6 to 10 percent. By the compound interest effect, the required repayment vehicles can be reached actually already after 25 years, and the loans finally redeemed.
The customer accepts thereby an oversaving of mind. 20 percent of the loan amount.
The excess sum is available to the builder in full after the loan has been repaid.
When granting the financing is expressly referred to the fluctuating exchange rates. By choosing short-term fixed interest rates, there is the possibility of exchanging the loan within the term in the better currency. The financing is thus flexible and cost-effective. Likewise, by paying a premium, a so-called foreign currency loan currency cap, the customer can acquire the security of no longer bearing currency risk up to a certain rate.
With a construction financing it is important that the interest rates are right in any case. Construction financing can be handled using a wide range of financial products, and each builder must decide for himself how important it is to him to opt for a particular product. The interest construction financing play thereby according to experience a particularly important role. It should be ensured that the individual interest construction financing is in no case too high. Otherwise it can come to the fact that by high interest in any case a construction financing can become enormously expensive. On the other hand, it may of course also be possible that low interest construction financing a construction financing can be very attractive in any case.
The interest rates of construction financing are usually dependent on which product was concluded. Who uses for example an interesting and good building society contract, in order to be able to take up thereby for example a good and favorable credit, which should pay attention also to the fact that the interest Baufinanzierung is particularly low. The interest construction financing should be compared in any case also once very intensively with each other. Individual financial products can ensure here essentially fast for the fact that the construction financing can be arranged very differently. A classical credit is here in each case a possibility, which is particularly gladly considered.
It should be ensured that the interest rates for the construction financing are in no case too high and of course, in addition to a bauspar contract, a lot of other products are considered, which ensure that a loan is selected and considered. The interest construction financing should be selected according to how the product is structured.
A classic loan is used in most cases for construction financing. The interest rates are dependent on many factors. For example, it makes a significant difference whether the building savings contract is concluded over a short period of just 5 years, or whether the building savings contract is concluded over a period of, for example, 10 years, up to 20 years.
In most cases, the interest rates of construction financing are more attractive when a loan is taken out over a short period of time and the rates are chosen very high. In any case, when taking out a loan, but it should be ensured that the installments can also be paid comfortably. The interest rates should not be kept so low in every case that there is hardly any possibility to really finance the installments. A loan for construction financing should always be designed in such a way that there is effectively a possibility to be able to pay the installments also well. Also, there should be the possibility that a financial buffer zone is available, which allows, for example, vacations, or other things in any case.
In practice, this is possible in any case – however, it should be calculated in advance exactly how high individual loans may be in total, without there will be major problems for their own financial budget. Here the credit period and naturally also the height of the credit play in each case an essential role. The interest rates of construction financing are controlled by many factors that must be weighed carefully.
When looking for a home of one's own, it is important that suitable liquidity is available. these financial savings should be relied upon when building a home of one's own. Basically, most people save for a very long time on their own house, or even their own apartment.
In principle, the construction money necessary for this in any case is nevertheless very practical, since it is necessary to provide the sums ultimately missing to the complete construction financing. The construction financing is concluded in most cases over a very long period of time. It is not uncommon for several years, sometimes even more than a decade, to pass before a house can be paid off in full. The right building loan should be applied for in good time, as it may take a while before it is paid out in full.
The running costs for a house building, or in addition, for a change are not to be seen through necessarily from the outset. It is possible that unexpected costs arise, which ensure that a construction project becomes significantly more expensive than it was ultimately planned. Who decides, for example, for a different interior, it will quickly notice that, for example, higher-quality materials can be significantly more expensive than it is the case with inexpensive materials.
The building loan can be concluded with a building society, or also with a bank. There is the possibility that a credit is taken up with a bank, by which then the suitable sums can be paid. Who is interested in a loan at a bank, or even at a building society, must also know that there are very many banks that now offer products that deal with the construction money, or even other ways to finance construction. The necessary construction money, however, does not always have to be such a product.
It is also just as well possible that, for example, a building savings contract is redeemed to have enough money as a result. If it is a question of the appropriate money being made available, a loan can also be taken out privately, for example.Who decides for this kind of credit as building money, which should pay attention however in each case to the fact that also a reasonable credit agreement is taken up. This contract ensures that in any case everything is fixed in writing and there can also be a clear regulation in case of problems – if necessary by court.
Also in the private sector, it is very common that the construction money is taken through a loan, which extends over a very long period of time. Who would like, which can arrive however so very favorably at money. There is just private very often the option that money can be borrowed at very attractive and very cheap conditions. Closing fees are usually waived completely. In addition, it is also possible that, for example, the interest rate is significantly lower than it would otherwise be the case with a loan for the construction money. Most people, however, do not choose a loan that is handled through a private person, for example, a friend, but a loan agreement that is concluded through a bank, or even through a building society.
Real estate financing – What should one pay attention to?
For many people, the dream of owning their own home should come true at some point in time. In order to be able to pay for the new real estate, just as many people take up a loan.
Banks usually distinguish between private and commercial real estate financing. Borrowers of a private financing use the property mainly for residential purposes, while commercial financing is for real estate used for economic purposes.
How does such a real estate financing run off?
Usually, the buyers of real estate save a capital to use it later for financing. The bank loan is needed to finance the difference between the saved equity and the purchase price of the property. In order to guarantee the real estate buyer a fixed interest rate, usually annuity loans are concluded.
Instead of the annuity loan, however, a building society loan can also be taken out, which has some advantages, as the interest rate is often lower and money can be saved as a result. The Bauspardarlehn also offers buyers more flexibility, as it does not involve a fixed interest rate. This means one hundred percent interest rate security. As a rule, the banks are also very open to unscheduled repayment options.
Because of the many advantages the Bauspardarlehn brings along, it would be recommended, however it can be locked only if one already locked some years before the real estate purchase a building savings contract.
In the meantime banks offer however also loans for real estate buyers without saved own capital funds.
What is a repayment?
A redemption is the return of money from the borrower to the lender.
The higher the repayment, i.e. the higher the repayment percentage, the faster the loan will be paid off. Many banks are flexible in terms of repayment and therefore the real estate buyer can adjust the percentage of repayment to his financial situation.
Which provider is the right one?
The large number of providers makes it difficult for borrowers to find the best offer, but there are many Internet portals that make the search much easier. Some of these portals are ImmobilienScout24.de and baufinanzierung-vergleich24.de. On ImmobilienScout24.de, various providers and their offers are listed, while on baufinanzierung-vergleich24.de can directly request an offer comparison.
To really get the best possible real estate financing, you should therefore directly compare different providers and weigh all the pros and cons.
Info: The providers and information presented in this text may no longer be up to date. For current information we would like to ask you to inform yourself directly with the provider (homepage) or in a comparison.
However, the perfect provider may be different for each real estate buyer. It all depends on the offer of the real estate financiers and the individual wishes of the customers.
What do different providers offer me?
Allianz construction financing
Allianz Baufinanzierung offers customers the use of the Riester subsidy and advertises favorable financing conditions. Likewise, the customer is flexible in the fixed interest rate (up to 25 years).
ING DiBa
ING DiBa offers both new financing and follow-up financing.
Repayments are from 1% to 10% p.a. possible, as well as special repayments up to 5% p.a.
Schwabisch Hall
Schwabisch Hall offers the Riester subsidy, as well as special loan programs to meet the individual needs of each customer. Schwabisch Hall also advertises "SofortBaugeld". An interest rate security with a fixed interest rate up to the total term of ca. 25 years is also offered by Schwabisch Hall.
Old Leipziger
Alte Leipziger offers its customers both an interest guarantee and flexible repayments. In order to make the dream of owning a home come true particularly quickly, Alte Leipziger also offers immediate financing.
Tip to the conclusion:
Many different banks offer individual consultations. Since a real estate financing is a big step, one should be quite sure with its provider and quietly take several consultations with different banks to really find the best offer.
The way to own real estate is not very easy for most people. Many do not get around a well staggered financing, which must first be put on the legs. It is important to get an idea of the financing possibilities at an early stage and to calculate various methods and alternatives. In practice, most people work when building a house with a real estate loan, or. with a construction financing.
It is not uncommon that appropriate real estate is also financed through a building savings contract, where the loan at the end of the term, or. when the target savings amount has been reached, is paid out. The financing itself is often secured over a long period of time, sometimes 10 years or more. It is also a question of securing and using appropriate interest rates on the loan over as long a period as possible.
House building advance – how does the conversion run?
The practical conversion of the building of houses usually takes place via a building contractor. After the architect has approved the building, it is important to make sure that the builder also builds the house based on the concrete plans. Until it then comes to the topping out ceremony on the building site, passes under circumstances still quite a while. In everyday life stands first of all over a long period a carcass on the building site of the real estate, which must be processed further.
The screed must be laid, electrical wiring must be laid, window frames must be planned and inserted, and stucco must also be applied to the ceiling.
It is also possible that the outer wall will be plastered, for example, or decorated with clinker brick. Who worries about what can happen here everything, which should also think about a so-called carcass insurance, which unfortunately far too few builders conclude. The practical insurance for the carcass has the advantage that the building site and the property under construction are insured.
Insure shell construction – get quotes online
Appropriate offers for the insurance of a carcass can be obtained in the meantime particularly over Internet. It is quite possible that the individual offers are created digitally and then sent to the customer. Who would like to lock an appropriate insurance, which should consider in each regard that also the insured sum must be indicated, up to which the complete building is secured. This is to be evaluated depending upon project and depending upon status of the building very differently. In everyday life it is possible that especially private building projects can be secured and protected by an appropriate insurance policy.
There are many ways to finance a home purchase through a loan. The house construction loan, or. the possibilities of the housing construction financing should be compared more exactly with one another. A frequent credit form, which is used by many for the house purchase and/or. the real estate purchase is used, is the annuity loan.
Constant repayment of the loan amount is possible
Through this form of credit, the sum of repayments remains the same throughout the term of the loan. By this house purchase credit can be calculated exactly with the repayment of the rate.Another way of financing is to save money through a repayment vehicle (for example, an insurance policy). Here, however, it is important to pay attention to how this repayment vehicle will develop. This is associated with a certain risk.
The house construction loan is also possible as a foreign currency loan. Here, the residential construction financing or. Construction financing often carried out in a currency such as Swiss francs. However, the interest rate risk and the exchange rate risk are possible risks that must be taken into account.
Before taking out a loan for the purchase of a house, however, you should pay close attention to a comparison of the various conditions. The amount of equity is also decisive here. To the already mentioned alternatives can also the building savings loan as a possible form of financing or. Supplement are used.
In construction financing, the mortgage loan is still one of the most popular forms of financing. This is probably also due to the fact that the mortgage loan can be described as the most favorable form of financing.The entire loan is secured by the property itself. This offers such a high value that no further collateral is required. The bank lets itself grant with the conclusion of the loan directly a mortgage right.
This means that it is entered in the land register. This land charge then remains until the loan is paid off. This is the case either after the borrower has made normal repayments or after debt restructuring. In the case of debt restructuring, the new lender is entered directly in the land register. However, one should always be aware of the fact that a renewed land register entry is also associated with the corresponding costs again.The mortgage loan is also a classic annuity loan.
That is, the monthly rate to be paid over the entire term remains the same high. But its composition changes over time. If initially still significantly more interest is paid and only a very small part of redemption, then after some time the amount paid for redemption becomes higher and higher and one day even exceeds the amount paid for interest.
However, before deciding on a particular mortgage loan, one should carefully compare the different offers with each other. Because only in this way you can also find out the most favorable provider. Even small differences in interest rates can have an impact on construction financing. Thus easily several thousand euro difference between the individual insurance arise.
Loan repayment through rental income?
In a current press release the federation of German owners makes attentive to the fact that one can let again established dwelling today only if the energy document of identification for the buildings concerned can be submitted. Getting it costs the owner money, because energy experts come to look at the building's insulation, windows and doors, take measurements and finally calculate the average energy consumption for heating. Some builders try to pass on the fees incurred for this to the tenants. This is not legally permissible.
Nevertheless, renting is a way to alleviate the financial burden of construction financing. The magic word here is called granny annexe. The advantage for builders is that smaller apartments are now very much in demand. Particularly the dwelling, which has maximally 45 square meters, is brought with a reasonable rent level usually within fewer days to the man. One should set the cold rent in such a way that it does not exceed 285 euro with a dwelling suitable only for one person, in order to make it interesting also for target groups with social relations.
If you want to be disturbed as little as possible by your tenant, you should plan the layout of your house in such a way that the granny annexe has a separate entrance. It is also important to design the supply of energy, heat and water in such a way that it can be billed separately. This increases the costs of the construction financing a little, but makes itself later positively noticeable. The contribution to the construction financing can make this living space either by an external renting or one takes in there for example the parents.
Building interest comparison – What to look out for?
The dream of their own four walls floats around in the heads of numerous people. If you have to pay the rent month after month, you ask yourself again and again whether it would not be wiser to finance your own home. The fewest create it however this project without strange assistance into the act to convert. Who already has enough capital to buy an apartment or a house?. To buy a house or even to finance a building project? If you want to make your dream come true, it is important to compare different offers in terms of construction financing with each other and to take a close look at the construction interest rates.
The term "construction interest" refers to the interest rate conditions that apply to a construction loan or mortgage. Renovation of the home comes to bear. A distinction is made between the nominal and the effective interest rate. The effective interest rate is more informative, as it includes all additional fees incurred. If you only look at the nominal interest rate, you don't know what the effective costs are. The capital market is also not easy to calculate. One can never know how long favorable interest conditions can hold themselves and provide for a low building interest rate.
When researching the construction interest rate, it is extremely relevant to consult current information. What was meaningful a few years ago, has nothing to do with the now factor. Interest rates vary not only in terms of the respective providers, but also due to the intervention of the European Central Bank. This tries namely in economically difficult times with a low interest rate not to endanger the stability in the individual countries further. If then parallel to this the inflation rate rises, the European Central Bank raises the key interest rate. This leads in consequence to the fact that the building interest rises.
At the latest now it should be clear to everyone that it is very important to get an up-to-date picture of the interest conditions. The timing of a construction loan determines whether you can benefit from favorable interest rates. In 2010, the construction interest rates moved at the low level of about 4%, which meant an advantage of about 4% compared to the conditions from the 1990s. A comparison of construction interest rates for 2011 can lead to enormous savings.
An investment in real estate can be considered as a long-term financial transaction. And that is exactly why it is so important not to jump at the first offer when it comes to construction financing. In all probability, construction interest rates will still be offered at favorable rates in 2011. A long fixed interest rate is recommended by experts. Although developments on the capital markets in 2011 indicate a slight increase in the inflation rate of up to 2.2%, the construction interest rate should nevertheless settle at a still attractive value.
If one accomplishes a building interest comparison, one can find out, which offerers offer also for the coming year the best interest conditions. And it is not only the construction interest rates to examine, but also the unscheduled repayment options and special termination rights. The more creative the borrower can be, the better. In principle, it can be said that a low construction interest rate should be contractually secured over a long fixed interest rate period in order to protect against the risk of interest rate increases.
Find real estate in Austria
To be able to call an apartment or a house one's own is a big dream of many people. No matter whether in the city or in the country, this dream can be realized everywhere. Some are often desperate to find a suitable apartment in their favorite city. One finds numerous offers on real estate search sides.
There you can search specifically for his ideas and wishes and thus get only relevant offers. You will not only find properties that are offered in the inland in Austria, also some foreign properties can be found out in this way. In addition, one saves then also immediately the fees for a broker. Those who want to resell their own property can also do so here.
Real estates are suitable straight in these unsteady times also as Finanzanlage. If you buy condominiums and then sublet them, you can often achieve a higher return than with a security. Of course, this yield is even higher if the property does not have to be financed by borrowing or loan. Nevertheless one can obtain also here small profits. Those who then renovate their newly purchased property can claim this renovation work on their income tax return. Thus, the assessment base is reduced. Income from renting and leasing can then also be the first step towards owning a luxury property.
Home financing tips
A house financing is to be managed with very detailed cost statements and of course the appropriate comparisons. The possibilities of financing are offered by different credit institutions. Your own bank is usually a good place to start, as it already has a good overview of your financial situation. But also outside banks, such as online banks or pure home financing institutions are available for selection.
Financing can also be concluded through the construction company. However, this does not offer the conditions itself, but is also in negotiations with a bank. With a house financing one may consider naturally not only the repayment installment which can be paid, but also the operating cost and the operating additional expenses. All these factors must be taken into account when calculating the financing amount so that no increase has to be made. This is usually associated with enormous difficulties. A correspondingly good credit rating is a basic prerequisite for such long-term financing.
Drawing up a budget
Much better stand the potential builders, if some equity in the form of cash or even a building savings contract is available. With the building society a usually very interest-favorable loan can be taken up. If the house financing is a full financing, the house banks are usually no longer of the game. These usually require at least 20 percent equity. The choice of the building partner would be very carefully considered as the next step. For the use of comparison calculators, the basic information, such as the amount of the loan, the intended term, the appropriate repayment rate and the fixed interest period must be determined. In order to be able to determine these data, the preparation of a budget is highly recommended. This serves the own overview and is seen by the appropriate banks very gladly.
Debit interest rate is important
From this budget plan the monthly margin results, in which the repayment rate can move, without very large losses are to be accepted. A house financing is a very large and long-term burden and should be calculated with all contingencies, such as unemployment of the main earner. The fixing of the debit interest rate is decisive for the constant installments. For example, if this is set at 15 years and the object has a value of 200000 euros, for a loan amount of 100000 euros, the repayment rate is 321 euros at an interest rate of 2.85 percent. This would already be a very good offer. If you do not set a debit interest rate, the interest rate at the beginning of the term is usually over 3 percent. The installment amount is then much lower, sometimes at about 260 euros, but over time, strong fluctuations can arise, which bring a constant change in the amount of the installment.
Construction financing calculator for Austria – calculate construction financing
Perhaps you already once thought about it that you would rather live in the own dwelling than eternally rent to pay. This is especially interesting when interest rates are at a low level.
Then you can be lucky that the monthly charge is lower than the rent payment. Of course, you must have certainty before you start such a project. Today, it is easy online that you can get good information.
This can be done, for example, using the construction financing calculator. This shows you very well what monthly amount you will have to pay if you take out a construction loan in a certain amount. So you can easily calculate in what price range you can afford a house. Consider thereby also that for example additional expenses for the notary accrue.
How to use the construction financing calculator?
It is important that this calculator is quite easy to use. A good guide ensures that you can easily enter your data. Then you will see very quickly what monthly rate you have to expect. Of course, you can take this into account when planning your future life. It is actually only important that you enter what amount you need for financing. In addition, of course, the term of the loan also plays a role.
If it is important to you that the loan is paid quickly, you must expect a higher rate. This can be worthwhile, however, especially when interest rates are currently low. Just see how it is best for you to repay the home loan. The calculator is a great help to you in the case. You can plan and calculate much better.
Is it difficult if I am interested in the construction financing calculator?
If you go exactly according to the instructions, you only need to enter some relevant data. Then you will succeed very easily that you get an overview of what money you need every month for the construction. You have a good overview of what financial resources are left to cover the cost of living.
Life becomes a good deal easier when you use this service. It is worthwhile to give some thought to this matter. It is also important that you can easily use the calculator online from home.The time you need for this is not very high. Nevertheless, you have a great advantage and can plan a construction much easier. It is not that you have great inconvenience because of the application of the calculator.
When it makes sense to take out a construction financing with interest cap?
The loan resp. the home loan with interest rate cap is a financing with a hedge of the amount of interest on the loan. If the interest for the loan rises above a certain limit, the amount of interest is automatically limited by the interest cap upwards.
Depending on the individual financing, this can be quite useful and provide peace of mind when planning to repay their real estate financing. Such a hedge should be chosen in any case, who you expect during their financing period with sharp increases in interest rates. In this case, the costs of the interest rate cap hedge must be offset against the higher interest rates in the individual case and an individual decision must then be made.
What brings me the construction financing calculator concretely?
You quickly realize. which costs come by a building on you. It is crucial that you can calculate well with the help of the calculator. You will then know very well what else you can afford apart from paying off the property.
Since this is a purchase for life, it is important that such an investment is well thought out. Then there should be no difficulties in the area. So just take a look around. It is worthwhile and helps you properly if you want to save money.
Mortgage interest in Austria – What to watch out for?
A crucial aspect of a real estate financing is the mortgage interest and the ancillary costs of a loan.
Although the mortgage rates of all banks in the member states of the European Union are linked to the key interest rate of the European Central Bank, a comparison immediately reveals differences between the individual banks.
Favorable mortgage rates in Austria
Due to the key interest rate of 1.00 percent of the ECB, the current mortgage rates are at a very low level, and construction money is therefore cheaper than ever before.
Nevertheless, the interest rates in Austria for the interested builder still more attractive than, for example, in Germany, since Austria, like Switzerland, is increasingly interested in bringing money into their own country. By an intensive comparison of the offered conditions still numerous more favorable offerers of real estate loans can be found thus.
Mortgage interest is paid in the currency of the country, as is the loan to be repaid. That is, with a loan from Austria the repayment takes place in Austria.
In contrast to a foreign currency loan, the interest rates are not linked to exchange rate fluctuations of the currencies, which means that there are no advantages or disadvantages in the interest rate due to exchange rate changes.
Does a foreign currency loan make sense?
Interesting are the foreign currency loans in comparison, with the usual annuity loans for particularly solvent borrowers, since these loans are final maturity, and the mortgage interest is the interest of the currency for which the builder has chosen when applying for the loan.
With the opening of the financial markets, it is possible without further ado to make the application abroad itself. However, it is more convenient and recommended to take advantage of the support and advice of financial intermediaries. These financial intermediaries take all the data necessary for the application on the spot and forward the application to the previously selected bank. Numerous platforms are available to professionals to compare individual offers, and actually find the most favorable conditions.
Without support, the application for the builder is often due to other legal provisions with a higher effort as in Germany.
It is always important to remember that mortgage interest rates in Austria can change just as often as in Germany.
The usual instruments, such as the registration of land charges, are used for collateralization.
In any case, the possibility of online via existing platforms to make a financing request is favorable. All relevant data are entered in the displayed masks. In most cases, the builder-owner receives a comparison of the most favorable credit institutions for his needs after a short time. Often, this comparison is also an instant information, whether a financing request could be successful.
Home loan for home financing
A housing loan is a form of financing that is used exclusively for the purchase of an apartment or a house. In contrast to the mortgage loan is with a housing loan thereby a security not necessarily necessary.
As long as you have the necessary creditworthiness, the credit limit in the case of a home loan is almost unlimited. Any collateral can certainly reduce the interest rate by a bit, as the deal is then less risky for the bank. The term can be very different for home loans. The maximum term is approximately 30 years.
For what at all a home loan?
A housing loan offers the optimal opportunity to realize the dream of your own home. Who does not dream of independence in its own house or apartment. Since most people do not have enough capital to buy the property in question in cash, you have to resort to credit institutions or other lenders.
What is the repayment schedule for a home loan??
In principle, all possible repayment methods are available for a home loan. If you do not have enough money at the beginning of their term, you can agree to repay only after a certain time. Likewise, it is possible to pay over the term only the interest and only at the end of the loan amount. However, the residential loan usually has a constant repayment, which changes at most when the interest rate is adjusted. However, the credit crunch has revealed that banks pass on the given key interest rates only in a limited way.
What is the interest rate for a home loan??
Basically, the interest rate can be fixed or variable. Variable means not only for the housing loan that the fixed interest period is very short and thus also a low interest rate is offered. But this should be treated with caution, especially with the long term of a housing loan, because the interest rate can be increased after a short period of time. This also results in varying repayment. The counterpart to this is the fixed interest rate, where there is no change over the term of the loan. However, the bank is forced to include a margin for interest rate fluctuations and you can expect a high interest rate right from the start. However, the fixed interest rate is disadvantageous for housing loans, as it is only offered for limited terms of up to 10 years.
Current interest rates for home financing
What now turns out to be advantageous now depends on the general development on the money and capital market as well as on the economy. In general, the variable interest rate can be very tempting and then turn out to be a flop. This is what happened to many people during the credit crisis. Nevertheless, variable-rate home loans are extremely popular.
In addition, it depends on the interest rate during the year or the whole year. During the year means that the home loan will accrue interest several times during the year. The decisive point in terms of comparability is therefore always the effective interest rate. This gives the cost of the loan for one year and usually already includes other costs such as origination fees and commissions.
Never forget to ask for several offers, because the offers can vary greatly from one institution to another for housing loans. So to guarantee that you can take the best offer, you need to obtain many. In doing so, don't get too attached to your local bank if they are not willing to give you the terms you want on your home loan.
Housing loans for everyone?
To get a home loan you should be employed, otherwise the matter turns out rather difficult. Furthermore, in the case of housing loans, a budget calculation is made, which looks like this.
The starting point of the calculation is the income of the respective household.
When do I get a housing loan?
To see if you have the necessary creditworthiness for the home loan, any costs will be deducted. This includes electricity/gas/heating, living expenses( vacations, clothing, food and drink,…), car expenses, insurance, existing loan installments and anything else that reduces disposable income. Only in this way the bank determines whether you are worthy of the housing loan. In addition, you must provide the bank with the data of the apartment or land, as it is registered in the land register in the case of a home loan. This facilitates the bank's access in case of insolvency. You can get the necessary data concerning the land register by means of the land register sheet, which can be picked up at the district administration for a certain fee. If this is not available, you have to tell the bank the land register number, the size of the property( m², building,…) and place of the land register. If you are in the process of purchasing a house, it is also possible to obtain an extract from the land register for your home loan from a real estate agent. A guarantor is also obliged to submit a budget statement.
As you can see, the bank checks each borrower pretty closely for creditworthiness. This is not only advantageous for the bank, but also for you. You can thereby in the case of a housing loan quite accurately measure how high the housing loan can be. These credit checks are actually carried out according to the same standards for each housing loan. Measured against the average amount of housing loans, this is also carried out particularly closely. Because hardly someone takes a housing loan around 5000 euros, but one moves thereby already with higher sums.
Homeowner's insurance – What you should look out for
Homeowner's insurance can cover damage that occurs to the building, usually the following risks are covered: Fire (lightning, explosion as well as implosion), tap water damage, burst pipes, frost, storm and hail.
The following damages can be partially included, depending on the choice of tariff:
Water supply, drainage and heating pipes also outside the house, surge damage (the immediate lightning strike), natural hazards (landslides, earthquakes, floods), graffiti, loss of rent coverage, etc..
When should the homeowner's insurance be taken out?
The insurance should be concluded before the start of construction and this as a shell insurance. Because already the shell of the building is exposed to various risks. Moving into the finished building must be reported directly to the insurance company.
Act correctly in case of a loss
Any damage must be reported directly and this is best done in writing. In case of major damage, the police should be informed, the created file number must be reported to the insurance company. The policyholders are obliged to minimize the extent of the damage, for this reason it is important, for example, to notify the fire department directly in case of fire. If there is a tap water damage, the main tap must be closed.
House financing in Austria
Houses are among the most expensive purchases in our lives. For this reason, many people ask themselves a whole series of questions about the financing of this extraordinarily enormous purchase. We will try in this article to give some as concrete as possible answers to these questions.
Of course, this is not always possible, because individual aspects have a great influence, but we will try to proceed as detailed as possible. In addition, our comparison calculator can be used to get an overview of possible conditions and compose the house financing accordingly from the components described below.
The federal states finance with – subsidies
It is very important that no one feels left alone in such a large project as building a house. Through the various subsidies in Austria also no one must feel lonely. However, this first point already proves that there are many local differences, because in each state the subsidies are regulated differently.
In most federal states (Burgenland, Carinthia, Lower Austria, Upper Austria, Tyrol and Vienna) a loan is offered at an extremely low interest rate. The amount of the loan is determined by various factors, such as marital status or energy efficiency of the house.
This subsidy will not be enough to finance the entire construction project, but it represents great assistance in combination with a bank loan. As a guideline we can give 60.000 euro indicate. Depending on the influencing factors, it could be as little as 40.000, or a little more than our guideline, but as a rule you can expect a sum around this level to help with construction financing.
In Carinthia, part of the subsidy is granted as an annuity subsidy. There is thus helped in the repayment of the bank loan. In Vorarlberg and Salzburg the country pays a sum of money, which does not have to be paid back. This is not due until the work is completed, but can be included when applying for a bank loan.
Despite the many regional differences, one fact remains irrefutable. In one form or another, the country's subsidy can be planned into the house financing. This should be considered in terms of energy efficiency as well as the amount of the bank loan taken out.
What different loans are used?
The subsidies and equity will usually not be enough to build a house. Even if a building plot is already available, these two forms of financing can quickly reach their limits. For this reason, we present here other forms of raising money, which are supportive for the construction project.
Building savings and the building savings loan
Next to the classic savings book, the building society loan is one of the most attractive forms of savings in the Alpine republic. This form of saving leads not only to equity capital, but also to the possibility of a particularly preferred form of credit, namely the building society loan. To earn an entitlement to this loan, a predetermined sum must be saved up. Provided 50.000 Euro building savings loan is aimed for, the building savings sum should be between 20.000 and 25.000 euros. This is an approximate 50 percent rule.
What are the advantages of the building savings loan?
The Bauspararlehen scores primarily by particularly low interest rates. In some variants even fixed interest rates are offered over 16 years, which belongs with a bank loan from the private sector rather to a rarity. In addition, the bausparkassen advertise very flexible repayment terms, which can even be over 30 years or longer. There is indeed a significant disadvantage of the building society loan, but this does not completely negate these advantages and so this part of the house financing should definitely be aimed for.
By the way, the two major building societies in Austria are Wustenrot Bausparkasse and ABV Bausparkasse. If your bank offers both, compare the options according to your personal requirements.
Disadvantages of the building society loan
The major disadvantage of this form of loan is the uncertainty of the time period. It is possible that the building society does not have the desired loan amount available. This circumstance arises because the funds have only a certain pot available for lending and they are not allowed to freely use the interbank market. This can significantly delay a construction project. Moreover, the bausparkassen can forecast only one payout date. So find out in time if a bauspar loan is available at the right time.
In addition, the repayment of a bauspar loan is not always in the form of constant annuities, but as in the case of subsidized loans with increasing installments. So it may be that the installment payments in 10 years suddenly exceed the budget of the household accordingly. It is therefore necessary to plan well in advance, because just after this time, repairs to the construction project may become necessary at the same time. Washing machines, pipes and boilers do not last forever.
A brief look at the mortgage loan
The mortgage loan is also a very common form of home financing. The difference to a consumer loan or car loan is the registration of the debt in the land register. This is one of the best safeguards available for a loan, and this in turn is reflected in comparatively favorable interest rates. In addition to the fact of registration in the land register, this loan can also be very flexible. The start of repayments can be varied, the amount of interest is not set in stone and, above all, the method of repayment can be adjusted.
How to repay a mortgage loan?
There is no prescribed form of repayment for a real estate loan. In many cases, an annuity loan is chosen, as this is simply a very common and familiar form. The height of the credit rates remains thereby always the same and the contained portions at repayment and credit interest shifts over the time. At the start of repayment, the loan installments contain almost only interest payments, while towards the end of repayment, practically the entire installment is spent on repayment.
Tip: In many cases, however, we recommend repayment by installment repayment.
Another option is the installment repayment. Here the repayment starts with perhaps frighteningly high rates, since the sum of the repayment remains the same over the entire period of time. At the beginning of the repayment, of course, high interest is added to this fixed repayment and this additional amount becomes less and less over the term.
Why and when we recommend installment repayment?
We have already shown above that both the subsidized loans and the building savings loans tend to grow progressively in terms of their rates. If, in turn, the rates for the bank loan decrease, then this can save the future household budget. Even if the builder is located in Salzburg or Vorarlberg, where the subsidy is provided through a financial grant, an installment repayment turns out to be more advantageous. Because the subsidy helps with the initial high rates, as the subsidy is usually paid out after completion. So this can be matched with the start of repayment suitable.
Which credit institution is the right partner?
Similar to the subsidies, many subjective aspects play a role in the decision here. A number of questions need to be answered in order to choose the right bank for the mortgage loan or. Selecting a real estate loan:
- How high may be the monthly installments for the loan repayment?
- How quickly should the loan debt be paid off?
- Which interest connection is to be selected for the mortgage credit?
- When to start the repayment?
- How high is the actual effective interest rate incl. the interest rate on the loan?. fees etc.?
- How long should the term of the loan be??
- How many interest dates there are per year?
- How much equity is available?
These and other questions have as many answers as there are loan applications. But we can offer a suitable solution for these issues as well.
Our home financing comparison calculator offers anyone and everyone the opportunity to run through various answers to the questions mentioned above. In this way, the subjectively most suitable answer can be found and subsequently also a suitable bank, which offers the best ratio from the desired conditions.
What housing costs come with a house?
The pure financing costs are usually not sufficient for a decision. The future house must not only be bought or built, but also heated, operated and occasionally renovated. The housing costs themselves are of course again very individual and depend on size, on the energy efficiency and also a little on the consumption of the inhabitants.
However, we can refer to the 2014 housing report of Statistics Austria and compare the housing costs of houses in ownership with other forms of housing to provide an indication of whether it is worth building a house and thus financing it.
In a first step, we must of course explain the definition of housing costs as made by Statistics Austria. Housing costs are all expenses that are used to create housing and fall under it:
- Rent
- Heating
- Electricity
- Water
- any other kind of operating costs (garbage etc).)
- any costs for maintenance and
- possible interest or. Loan costs
With a house in the own property naturally the rent as the first item is omitted and it comes the costs for the house financing, here as the last point represented, to add. Housing costs are evaluated on an annual basis for the following types of housing:
- Home ownership
- Home ownership
- Community housing
- Cooperative housing
- Other main rent
- Other
However, the statistics do not indicate the average cost, but the median cost per square meter. The media results after ranking all the collected values from the highest to the lowest and taking out the exact middle value.
If there are only five values (7 3 15 21 0), then the median is easily found by the third number after an appropriate ordering of the numbers (21 15 7 3 0 – median : 7). Now we give the housing types again, and expand them by the median housing cost per m² in 2014, as determined by Statistik Austria (source):
- Homeownership → 3.2
- Condominium → 5.2
- Municipal apartment → 8.3
- Cooperative apartment → 8.2
- other main rent → 9.8
- Other → 2.4
So apart from "other housing" which is difficult to define, the costs are lowest in home ownership.
The costs for the house financing are already included here. So regardless of the exact operating costs and maintenance on the builder or the owner, it is according to statistics lower costs than any other common type of housing in Austria. So, home financing can be a very good and, in the worst case, one of the best options when it comes to housing.
Planning just must not be neglected and in this regard we refer again to our home financing comparison calculator.
Hedge real estate loan from rising interest rates
Real estate loans are always tied to a prime rate in one way or another. In most cases, this is EURIBOR. This is that interest rate at which banks lend money to each other. This has been at one of the lowest levels ever in recent years. Nevertheless, or just because of it, the key interest rate can rise however at any time clearly.
This can happen for borrowers to a point where he can no longer afford the installment. Therefore, it is important to deal with this fact in advance and decide whether additional protection against rising interest rates is necessary or not.
There are three options for this in Austria:
Mortgage loan with fixed interest rate
Most mortgage loans are settled on a variable basis according to EURIBOR. To this must be added the so-called "margin", i.e. the bank markup. Both together result in the nominal interest rate. Depending on the interest rate situation, this results in higher or lower installments for the borrower.
To avoid this, one can opt for a fixed interest rate. This is always the same for a certain period of time or the entire term. Financial experts of the lender estimate the future interest rate situation very precisely and then grant different conditions depending on the creditworthiness of the customer. It should be noted that the bank of course strives to stay on the safe side.
This means the interest rate over the entire term will be more expensive in total than if one had accepted the fluctuations. However, one has the advantage of being on the safe side in case of high interest rates.
Low interest rate phases pass but without a trace on the borrower.
At present, however, there are very good offers for fixed-interest loans, precisely because of the current interest rate situation.
Home Savings Loan
A building society loan differs from a mortgage loan in several respects, as described above.
The biggest difference is certainly the interest rate corridor. This means an interest rate floor of 3% and an interest rate ceiling of 6%. In contrast to the fixed interest rate one receives with the building society loan thus also low(re) interest charged, is upward however also settled.
Especially customers who do not get very good conditions from the banks because of their creditworthiness will get very favorable financing in this way.
Interest cap – security with protective function
An interest rate cap is a security that you can buy independently of real estate financing. One can see it like a bet on rising interest rates. If the EURIBOR exceeds an agreed limit, the interest rate difference is offset against the value of the interest rate cap and paid out.
As a borrower, for example, you can buy interest rate caps equal to the amount of the loan outstanding. So you are protected against rising interest rates, because the difference in the rate comes back from the interest rate cap.
However, the purchase price of the interest rate cap in the financing must be taken into account. But most banks finance this in the overall concept with.
Mortgage loan in Austria
Especially because of the current ongoing low-interest phase, investing in real estate seems to be a particularly wise decision.
Nevertheless, many mistakes can be made both when choosing the apartment or house and when signing the contract. Some exemplary calculation can help to avoid misjudgements and to build up a profitable fortune by means of outside capital, thus by means of a mortgage loan.
Methods of interest calculation
The financial differences between variable and fixed interest rates can only be shown in view of the corresponding forms of repayment. The simplest example would be a bullet repayment.
With this type of redemption, repayments are not made monthly or annually, but are saved over the entire term. Life insurance is mostly used for this purpose. This brings some problems in the bullet consideration.
The current low variable interest rate unfortunately also applies to the interest guarantee for these insurance policies. Currently in Austria (as of 2015), only 1.5% is guaranteed on the savings deposit (minus fees). If the insurance contract does not provide for the yield to increase variably with the prime rate, then the variable interest rate on the bullet redemption can be an extreme cost trap.
However, mortgage loans are usually repaid using the annuity method. This means that a monthly loan installment is paid, part of which is used to pay the interest and another part is used for repayment of the principal. By means of this concept, the interest expenses are reduced over the term. In addition, many contracts stipulate that lower installments are paid in the first few years and that these only increase over time. This can result in a different picture to that of bullet repayments.
Variable and fixed interest rates for annuity repayments
Compared to bullet redemption, different figures develop here, but only conditionally different conclusions. Nevertheless, we want to highlight the deviations. Here we lean accordingly on the offered list of zinsvergleich.at.
An example in the guide article says that after 10 years of fixed interest at 2% (although for the period rather 2.5% is the business norm) additional interest costs of € 11.691 arise. Using the annuity method, this would be slightly less at € 9.191,27.
The differences become even more exciting if we assume that interest rates will remain as low as they are now for another five years, and then rise. With appropriate repayment schedules, we can compare this case of the variable interest rate on the loan with the fixed interest rate of 2% over 10 years. We assume an increase in the prime rate to 1%, which would result in 2.5% with the typical markup of mortgage loans. In this variant, the loan with fixed interest would only be € 1230.20 cheaper.
If, on the other hand, the prime rate rises even sooner or perhaps even more drastically, then the somewhat higher fixed interest rate at the beginning should quickly pay for itself. With regard to this hypothesis, we can examine the past evolution of the main refinancing rate. On 7. July 2011 the value was still 1.5%. That would make an interest rate of 3% with the premium on mortgage loans of 1.5. Am 4. September, the ECB has lowered the key interest rate to the current value (as of October 2015) of 0.05. So within three years there was a shift of 1.45 %.
We can also look three more years into the past and see that the prime rate at 3,. July 2008 was 4.25. This means another shift of 2.75 percentage points within three years. It must be mentioned, of course, that the current rate of 0.05% is actually already held stable for over a year. However, this is precisely what makes a loan agreement with variable interest rates riskier with each passing day.
It must not be assumed that in three years the interest rate will be identically low and therefore a fixed interest rate of 2% over five years would possibly be profitable. Finally, based on the rather average value of 1.50 from 2011, the average standard deviation is roughly 2.20% over 3 years. In this period, the interest rate thus moves by approximately 2.20 percentage points. Add to this the fact that with an annuity repayment, the losses tend to be smaller due to a fixed interest rate (see calculation example).
The question of whether to take out a loan with a fixed or variable interest rate therefore depends on a large number of other factors. Plotting the correlated interest cost of a bullet loan shows only part of the picture. Here again is a summary of all the criteria:
- How is the bullet loan paid? By an unprofitable life insurance, which is now shot down in the low-interest phase?
- How will the loan be repaid if it is not final maturity?
- What is the volatility of the ECB key interest rate??
These considerations in no way negate the illustrative example from zinsvergleich.at, but lend a new depth by including time considerations. But even the best financing falls flat if the wrong property is chosen.
The prudent real estate valuation
Debt financing of a property clearly costs interest. But already after the signing of the purchase contract and the Aufsandungserklarung flow to the owner in return yields. In this regard, we will focus only briefly on the increase in value of the apartment without going into fictitious rents through own occupancy or actual rentals.
The following consideration for estimating a real estate transaction can be done by any broker in the blink of an eye. We use the Tyrolean capital Innsbruck as an example here, as it is one of the most expensive cities in Austria. The real estate market report "Wi & Wo in Innsbruck" determines the market prices of the city year after year by analyzing all sales contracts that have been recorded in the land register.
From this an index is calculated which in this case is called PIX (Prochecked Real Estate Index). This can be used to show the average return from holding residential property in Innsbruck. The output from 2015 shows a return of 6.2% in 2014 compared to the year before (in the first sale sector).
Through the digital land register, any real estate agent can conduct a similar survey over several years and perhaps only for their own locality or desired district. Provided that the average appreciation is higher than the interest rate, whether variable or fixed, a mortgage loan may be considered a good investment. Of course, a more comprehensive valuation does not hurt either, but these calculations and considerations of interest rates and yields already form excellent key figures.