What impact will rising interest rates have on owners and buyers?

Financial experts are currently predicting that interest rates will continue to increase over the long term. This is partly due to high inflation . The rising interest rates are affecting mortgages and loans and are therefore also having an impact on property prices.

When selling real estate, many pitfalls lurk that diminish success.

Approach the sale professionally. We will help you. Contact us.

 

The base rate of the European Central Bank (ECB) has been at zero per cent for some time. This has made it possible to award cheap loans and mortgages. However, the base rate is no longer in line with the current rate of inflation (5.1 per cent) and must be raised sooner or later. This is something that will also affect borrowers, as the ECB lends money to the banks. The interest charges are passed on to customers.

What impact does the interest rate have on property prices?

Supply and demand affect prices on the property market. Low interest rates lead to an increase in demand and thus also in property prices. This is because more people can afford a loan or mortgage.

The inverse is true when interest rates increase. Demand and thus property prices decrease, as fewer households can afford the cost of a loan or mortgage. Owners who then arrange for follow-up financing must also reckon with higher costs for the new mortgage.

Should I sell up before interest rates increase?

Owners looking for high sales proceeds, or even relying on these to fund a new property and the costs of moving home, should sell before interest rates increase. Otherwise, profits from the sale will be lower and it will become more difficult to find buyers who have enough purchasing power and are eligible for a mortgage.

In the worst case, buyers will be unable to pay the purchase price. A repurchase may become necessary, among other things. Owners should contact a qualified and professional estate agent for support in selling and marketing their property.

When the follow-up financing becomes too expensive

Many people need their bank to finance their dream of home ownership. When an existing mortgage agreement is due to expire but the loan has not been fully repaid, follow-up financing must be secured either from the same contractual partner or from a new source. If the repayment rate for the new mortgage is too high on account of the high interest on the repayments, owners are often forced to sell their dream property. In such instances, foreclosure should be avoided wherever possible.

Ahead of the predicted increase in interest rates, owners should inform themselves whether they could afford follow-up financing or whether they can begin to repay the follow-up financing in advance. If they then determine that this is not the case, they should sell in good time before the increased interest rates affect the proceeds of the sale. After all, they will need the money to repay the mortgage.

Those who decide to sell up can benefit from the support of a professional estate agent, who can also help find a financing partner. Some marketing experts work with loan providers and can thus help broker financing agreements.

Do you need support in finding the right financing partner, or do you wish to sell your property? Then please get in touch with us. We will be happy to support you.

 

Note
In this text, the generic masculine is used for better readability. Feminine and other gender identities are explicitly included to the extent necessary for the statement.

Legal note: This article does not constitute tax or legal advice in individual cases. Please have the facts of your specific individual case clarified by a lawyer and/or tax advisor.

Photo: © hyrons/Depositphotos.com

APPRAISE YOUR PROPERTY NOW

Free of charge and without obligation

Senioren-WG: Aus dem Eigentum in die WG

Wenn sich im Alter die Unfälle im Haushalt häufen, fragen sich Betroffene wie deren Angehörigen, ob die eigene Immobilie noch das richtige ist. Seniorenresidenzen und Pflegeheime sind selten und oft teuer. Für Senioren, die ihren […]

Read more

Neues Maklergesetz: Was Sie jetzt wissen müssen

Wenn Sie beim Immobilienverkauf mit einem Makler arbeiten, fällt für diesen eine Provision an. Wer aber zahlt die? Bislang war die Bezahlung des Vermittlers im BGB nicht eindeutig geregelt. Mit Einführung des Maklergesetzes gelten nun […]

Read more

PropTech – digital innovations that also benefit private landlords

PropTech is short for ‘Property Technology’, i.e. digital technology for the property sector. The term is most commonly used in relation to start-ups developing digital products and services for every conceivable process within the property sector. […]

Read more

OUR TEAM

with passion for service

Mathilde Allemand

Office Berlin Wilmersdorf

Junior Project Manager

French, German, English +49 30 88 70 24 08 mathilde.allemand@aden-immo.com

Michael Bautz

Office Berlin Friedrichshain

Real Estate Agent

German, English +49 30 29 77 87 80 michael.bautz@aden-immo.com
Lars Drewes

Lars Drewes

Office Berlin Wilmersdorf

Head of Sales

German, English +49 30 23 633 533 lars.drewes@aden-immo.com
Foto Mitarbeiterin Isabelle Goncalves

Isabelle Goncalves

Office Berlin Wilmersdorf

Real Estate Agent

French, German, English +49 30 887 024 07 isabelle.goncalves@aden-immo.com

Robina Henicke

Office Berlin Friedrichshain

Real Estate Agent

German, English +49 30 29 77 87 80 robina.henicke@aden-immo.com

Annabel Huard

Office Berlin Wilmersdorf

Senior Project Manager

French, German, English +49 30 88 70 24 08 annabel.huard@aden-immo.com

Udo Lewin

Office Berlin Wilmersdorf

Real Estate Agent

German, English +49 30 23 633 533 udo.lewin@aden-immo.com

Olivier Montero

Office Berlin Friedrichshain

Real Estate Agent

French, German, English +49 30 29 77 87 80 olivier.montero@aden-immo.com

David Nguyen

Office Paris

Managing Director

French, English +33 1 56 33 70 70 david.nguyen@aden-immo.com

Hélène Salvanes

Office Berlin Wilmersdorf

Marketing & Business Development

French, English, German +49 30 88 70 24 08 helene.salvanes@aden-immo.com
Porträt Arnaud Schott_quadratisch

Arnaud Schott

Office Berlin Wilmersdorf

Managing Director

French, German, English +49 30 23 633 533 arnaud.schott@aden-immo.com

Cihan Selmo

Office Berlin Charlottenburg

Real Estate Agent

German, English, Turkish +49 30 220 66 11 77 cihan.selmo@aden-immo.com

Ulrike Siebert

Office Berlin Wilmersdorf

Marketing Manager

German, English +49 30 88 70 24 08 ulrike.siebert@aden-immo.com

Julian Strehblow

Office Berlin Charlottenburg

Real Estate Agent

German, English +49 30 220 66 11 77 julian.strehblow@aden-immo.com
Foto Mitarbeiterin Alice Thion

Alice Thion

Office Berlin Wilmersdorf

Rental Manager

French, German, English +49 30 887 024 07 alice.thion@aden-immo.com

Jeannette Zentel-Schertlin

Office Berlin Charlottenburg

Real Estate Agent

German, English, Spanish +49 30 220 66 11 77 jeannette.zentel-schertlin@aden-immo.com