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At 1% interests rate, that's e12.000 a year, e1000 a month. Not bad.
by toohotatopic 7y ago
At 1% interests rate, that's e12.000 a year, e1000 a month. Not bad.
- tehlike 7y agoIs it 1% interest rate over there?
- stevesimmons 7y agoYes, in Eurozone countries, 10 year fixed mortgage are typically 0.99%. It's amazingly cheap. Down from 3.5% ten years ago. The downside of low rates is house prices correspondingly very high.
- rsynnott 7y agoExcept here in Ireland, unfortunately; absolute lowest mortgage available is 2.3%. Repossession is especially difficult here, which raises the risk for the lender, and the banks unwisely gave out ECB trackers (as opposed to the EURIBOR trackers more common elsewhere) back in the day; some of these can be as low as 0.5%, so everyone else has to pay for that legacy.
- patrickk 7y agoYes, in Germany for example. Some cities are experiencing drastically rising housing costs as a result. There was a bank in Denmark (not in the Eurozone) offering negative rate mortgages. In reality the bank tacked on fees so they weren’t paying people to take out a mortgage!
- eschutte2 7y agoCheck that math
- toohotatopic 7y agoI did. Could you explain where I am wrong? The apartment is that expensive because people can finance it. It's stupid, because an apartment is not magically worth more because people can finance more. Unfortunately that doesn't matter to people who need a place to live.
- eschutte2 7y agoI don't know what to tell you, except that the monthly payment on a 1.2mm loan at 1% for 30 years (insert your loan terms here) is 3.86k, not 1k. Edit: put another way, if you pay 1k/mo on a 1.2mm loan, you'll finish making payments in 530 years. The Jeanne Calment loan!
- toohotatopic 7y agoIt's 3.86k if you want to own the property after 30 years. You don't have to. You might as well sell the house for 1.2mm after 30 years and just pay 12m per year on interests for 30 years.
- eschutte2 7y agoI'm sorry, I should have noticed you were talking about not owning it. I agree with the point that low interest rates mean higher prices, of course.
- gok 7y agoThat is not how interest works.
- toohotatopic 7y agoHow else does it work?
- kolp 7y ago25 year repayment mortgage on €1m loan will cost about €4.3k per month. Based on actual lending rate of c. 2.3%. Interest only loan will have lower monthly payments, but you will need to make an additional monthly contribution to an investment product, such as an endowment policy, in the hope that the investment product will be worth at least the outstanding capital at loan maturity.
- esotericn 7y agoA 25 year repayment mortgage with 0% interest is 4% a year (1/25).
- toohotatopic 7y agoAfter 25 years, the apartment is not worth nothing. People who ignore the bubble expect to sell the apartment after 25 years for the same price, or refinance with another mortgage. With some luck, the apartment is even worth more.
- esotericn 7y agoSure, that doesn't change the fact that you need 4% per year to buy it.