Loans at the lowest interest rates – how long will it stay that way?
What was almost unthinkable until the late 2000s, happened with the real estate crisis in 2009 – the absolute low-interest policy. It was the emergency brake that the national banks had to pull in order to save millions of house builders and apartment owners from ruin and to make it more attractive to the population to invest. Because one thing was clear: If housing loans are too expensive and people have to pump all their earnings into amortization, there is no longer any money left for the consumption of other goods – and that would be the death of any economy. Without consumption there is no production, without production there is no research, without research there is no innovation and further development. Interest rates had to be lowered significantly.
Zero Interest Policy
In theory, interest rates are minimally negative. The effects are easy to explain: It has never been cheaper to borrow money to finance a home. In the early 2000s, for example, you had to expect around CHF 6,000 interest per year for a loan amount of CHF 100,000 (plus an interest premium of at least 1%), today you only pay the interest premium, i.e. around CHF 1,000. This in turn means that with a fixed installment you pay off more of the loan amount than you would with higher interest rates.
The fact is and remains: interest rates are currently at record levels. You cannot finance your own home cheaper than now. The tendency: it can only get more expensive.
However, if you are considering buying a property, you should not be blinded by the current installments. Think carefully about what the rate can be that you can really afford. Because that’s what matters.