Anyone who is still dreaming of their own walls is probably wondering whether this is still realistic in view of high inflation and real estate prices as well as noticeably higher mortgage interest rates.

But many who have actually already fulfilled this dream also have worry lines on their foreheads.

Quite a few real estate owners even fear losing their home.

Kerstin Papon

Editor in Business.

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Quite apart from high energy costs and impending expenses for outdated heating systems, poor insulation, renovations or repairs, sooner or later the old financing will run out for many homeowners.

Then they are faced with a follow-up loan at mostly higher interest rates – if they get it at all.

Unless: the property has finally been paid off, or there are sufficient own funds to pay off the remaining debt without a further loan.

Those who have secured the historically low interest rates for a longer period of time, often not just for ten years, but for 15 or more, should consider themselves lucky.

This did result in a slightly higher interest rate on the loan, but probably still less than the current interest rate.

Provided that the lending institution has made this possible at all, for example with a view to the creditworthiness of the debtor, the value of the property or its own business policy.

According to data from FMH-Finanzberatung, a mortgage loan with a fixed interest rate of ten years currently costs 4.02 percent on average across Germany – in October it was a little more.

The range among the financial institutions recorded currently ranges from 3.57 to 4.73 percent.

The borrowing rate was last eleven years this high.

For comparison: At the beginning of the year the average interest rate was less than 1 percent, in spring 2020 - at the beginning of the corona pandemic - it was a historically low 0.62 percent.

If you choose a fixed interest rate of 15 years, then according to FMH it is currently 4.22 percent after a low of 0.89 percent two and a half years ago.

The financing service provider Dr.

Klein already observed in the summer

Much higher interest rates

However, the current interest rate structure should not hide the fact that much higher interest rates for real estate loans were due several years ago.

In 1994, for example, mortgage loans with ten-year fixed interest rates cost a national average of 8.81 percent, according to the FMH, and 9.22 percent for 15 years.

Also interesting: The average lending rates since then have been 4.04 and 4.41 percent, respectively, which roughly corresponds to the current level.

However, it is also true that in recent years - thanks to the low interest rates - many people have fulfilled their real estate dreams for whom this would hardly have been possible at other times.

It is now becoming particularly difficult for these borrowers.

However, it is not just the higher interest rates that are worrying many borrowers themselves, along with the sharp rise in energy and food prices - inflation in Germany was 10.4 percent in October, according to an initial estimate by the Federal Statistical Office.

In addition, many credit institutions have apparently become stricter.

According to those affected and brokers, they have increased the requirements for lending in some cases, such as existing equity or monthly income.

The high inflation within the credit check and credit calculation leads to higher costs for living and the management of the property.

In addition to a possibly changed assessment of the personal situation, this also applies in part to the requirements for the property.

A non-representative survey of 1010 people who own a property and have taken out real estate financing in the past five years, carried out by Yougov Germany on behalf of the real estate portal Immoscout24 in September, shows how widespread the concerns are and how the financing situation has changed .

A good half of the survey participants who have not yet taken out follow-up financing are concerned that they will no longer be able to afford the property if interest rates rise.

26 percent have found out about follow-up financing, but have not yet completed it.

In addition, for about half of those surveyed who took out real estate financing or follow-up financing or obtained information this year, financing has changed due to interest rate developments.

A good quarter now requires more equity capital than before.

For others, the financing was delayed (22 percent), the term of the fixed interest rate was adjusted (13 percent) or the repayment model changed (5 percent).