Through our mortgage loan comparison, it will be possible to find a suitable loan to build or buy a property. At the same time, you can look at cheap offers to pay low interest and fees. In addition, we give in this guide tips how to find the cheapest possible mortgage loan. But first of all, we show what a mortgage loan is and what its features are.
All important facts about our guide “Mortgage Loan” at a glance:
- A mortgage loan can be used for home construction or home purchase.
- In order to find cheap mortgage loans, one should especially look at the interest rate and the special repayments.
- The most common mortgage loan is the annuity loan, where the rate remains the same every month.
- Before the mortgage loan comparison, one should calculate its equity.
- A mortgage loan can also be combined with a Infrasavings bank loan.
1. What is a mortgage loan?
A mortgage loan is an ordinary loan used to buy or build a home. However, the real estate owner hands the rights to the property to the bank. Although he receives the necessary money from the bank, the bank can forcibly foreclose or foreclose the property as soon as the owner can no longer repay the debt to the bank. The gain of the administration or auction of the property would eventually go to the bank.
2. Overview of the properties of mortgage loans
To be able to make a mortgage loan comparison, one should first look at the characteristics of such a loan:
- So there is the feature annuity here on the one hand. This represents the composition of the interest and repayment. The annuity remains the same over the entire term and must be repaid regularly, ie in monthly installments. Only the interest and repayments can vary. If you want to calculate the annuity, you have to add the interest rate to the repayment. If, for example, the interest is three percent and the repayment also results in an annuity of six percent. For a loan of 150,000 euros would therefore have to pay 9,000 euros per year.
- On the other hand, finally, are the loan interest. These are charged to borrowers by the bank for obtaining the loan. easy to determine via a loan interest comparison.
- Finally, there is the repayment, which represents the monthly rate.
- Also important is the fixed interest rate. This indicates a fixed interest rate that will last for a few months or years. Often the fixed interest rate is given for ten years. Subsequently, usually a new interest rate is needed. This can of course be lower or higher. Because of this, it can be a risk and an opportunity.
- Meanwhile, the alternative to fixed interest rates is variable interest rates. Here the interest rate is not fixed during the entire term. This means that the bank can adjust the loan interest rate at any time, depending on the market situation, so that you have to pay more and sometimes less. This is therefore also a risk, because you can not predict how much you have to pay.
- Another characteristic is the duration, which represents a certain number of months or years. During this time, the loan must finally be repaid.
3. Mortgage loan comparison: How to find the cheapest deal?
If you are finally conducting a mortgage loan comparison, you should include various aspects in the test. This also includes knowing the forms of mortgage loans. There is an annuity loan, a term loan and a repayment loan. Most of the time, the annuity loan already described above is offered. Here, the rate is, as already mentioned, always the same. Only the parts of the interest rate and the repayment change bit by bit.
Special bank loan for home purchase – the mortgage loan
In addition, of course, you should keep the favorable loan interest in mind. However, not only the level of the interest rate plays a role here. It is also important, whether it is a variable interest rate or a fixed interest rate. The fixed interest rate has the advantage that there is no risk. After all, the interest rate will not change throughout the term. However, this is possible with the variable interest rate. Therefore, here is the risk that the interest rate increases. On the other hand, of course, this can also sink.
To recognize cheap mortgage loan from the beginning, but you should also look at the possibilities for special repayment. Therefore, not only the monthly rate but also the flexibility should be set before the contract is signed. It should be agreed, how often you can do a special repayment for free or how expensive the special repayment is.
Special repayments are otherwise very well suited to save. Because of these, the loan amount can be reduced before the end of the term. For example, if you pay an extra sum every half year, the entire loan becomes cheaper. Of course it would be best if special repayments can be carried out at any time free of charge.
But you should also look at the conditions. This is because each credit institution has different requirements for the borrower. Normally, however, a regulated income or a good job is required. This should guarantee the repayment of the bank. In addition, the property is usually well preserved and profitable. For example, a house that is as good as demolished is not enough security for the banks. If you also want to know more about the individual requirements, you can also read our corresponding guide “Credit Requirements”.
4. Step by step to the loan
However, before one can begin with the mortgage loan comparison, one should calculate the equity. This is quite easy in just a few steps:
- First of all, you should check your equity. In addition one counts all secure investments together. These include, but are not limited to, savings accounts, building society savings contracts, fixed income securities, time deposits, coins and cash.
- Then you count all shares, funds and bonds on this amount. However, this should only be done taking into account the risk discount.
- After all, a few net salaries are deducted from this amount. About three to six should be enough. These serve as reserves for financial emergencies.
- Anyone who has done this can ultimately add up all investments that are due only after a few months or years. These include, for example, fixed investments or mortgage bonds. But the return values of life insurance are also part of this capital.
By these calculations one knows finally, which equity is available. The missing money can finally be applied for as a mortgage loan. For this, as already said, a mortgage loan comparison is recommended.
5. Connecting mortgage loans with Infrasavings bank loans?
It is also possible to combine mortgage loans with a Infrasavings bank loan. Such a loan can be used both for building a house and for buying a property. However, it is always linked to a few conditions.
For example, homebuyers must make sure that energy efficiency is right, because it is important to comply with special energy-saving requirements. When building a house, you should also pay attention to the energy efficiency and in addition to the environmental friendliness.
If you would like to apply for the additional Infrasavings bank loan, you should always pay attention to energy efficiency
It is also important to know that this loan must not be obtained from Infrasavings bank but from the bank through which the mortgage loan has been obtained. Often, however, these banks do not inform about the possibility of combining loans with the Infrasavings bank loan. If you combine the two loans, you should only pay attention to the fact that you now have to pay two monthly installments and not just one for his property.
6. The conclusion: favorable interest rates are possible
In summary, we can finally say that cheap interest rates and overall cheap mortgage loans are possible. On the one hand, this is achieved by comparing the various loans in terms of interest rates, fees and provisions for special repayments. On the other hand, you can keep the interest rate cheaper by calculating the maximum equity. After all, you have to take the least amount of credit. At the same time, however, you can apply for the mortgage loan with a Infrasavings bank loan and thus increase the chances of favorable interest rates again. Incidentally, our online loan calculator can help you compare.