Construction financing 2019 becomes more complex. But still be feasible for many. Already in 2018 some things have changed. And some new things are expected for 2019. But probably the most important news first: the conditions for being able to finance your own property in 2019 remain favorable. But there are changes to kfw's subsidized loans that have already been introduced this year. If you are entitled to a building subsidy, you will have to hurry a little and the prospects for medium- or long-term building financing contracts will change.
Interest rate development construction financing 2019
If we look at the interest rate trend in recent years, we can see a consolidation of construction lending rates at low levels since the beginning of 2017. Experts call this a sideways movement. While home loan interest rates dropped dramatically from late 2010 to mid-2016, they have barely budged since then. For since 2015, many came to enjoy mini interest rates. There has been little change in the interest rate trend in 2018.
That's why the start of the new year will also begin with these mini-incentives. This favorable interest rate environment will continue for construction financing in 2019. The vast majority of the experts are quite sure about this. Currently, the majority of conditions for ten-year loans are around 1.5 percent. A significant rise in interest rates is not expected in 2019: if they do, interest rates will only rise slightly – depending on the decisions made by policymakers and central banks.
Promotions that are interesting in 2019
Of course, kfw's subsidized loans continue to be an adequate means of obtaining favorable loans. These subsidized loans are still bound by the requirements that were already in place in 2018. However, a significant change came into force in 2018, which has not yet penetrated the consciousness of many financing customers. All kfw loans for subsidized or preferential construction financing are now tied to a 10-year term. D. H. These subsidies must be repaid by the borrower in the course of 10 years.
The "baukindergeld" (child construction subsidy) launched by the german government in 2018 is really taking off in 2019 and will make construction financing easier for families and single parents in 2019. The program, which launched in september 2018, has already attracted more than 50 in its first 3 months.000 subsidies approved. However, since the annual budgets that the federal government allocates for this are capped, it's almost safe to assume that the 2019 budget won't last until the end of the year. Therefore, all real estate buyers are advised to take care of this promotion as soon as possible, before the pots are empty. For more information, see this interest rate comparison article: construction financing 2019
Geopolitical and financial developments in 2019
One particular aspect of influence is always global politics. And this is known to be turbulent. That's why currently the economic outlook, but at a very high level, is dimming a bit. The punitive tariff policy of the USA is just as incalculable as the expansive agenda being pushed in china and russia. But political uncertainties are also growing in europe.
The monetary policy of the european central bank is currently keeping interest rates low. Here, the ECB is primarily focused on promoting growth in all EU economies and reducing the interest rate burden on southern european states ffixed. This is why monetary facts, which are otherwise in the foreground, play no role in the european central bank's interest rate decisions. But one hears already first tendencies that next year the key interest rates could be raised minimally. An end to the bond purchases has already been communicated.
Basically, however, the ECB knows that only mini key interest rate increases are possible, so as not to cause major damage to the european economy as well as the european states. This is bad for savers. But for borrowing for the purchase of a property particularly good. Therefore, you can expect a particularly favorable interest rate environment for construction financing in 2019, which you should still take advantage of if possible.
Construction financing 2019 – plan for the medium rather than the long term
Due to the particularly favorable interest rate environment, medium-term maturities of 15 years are preferable to long-term construction financing with maturities of over 20 years. Why? Because the interest rate premium charged on long-term loans may cost more money than having to enter into a then possibly higher interest rate after 15 years with follow-on financing. But to be on the safe side, we recommend consulting with an accomplished ACCEDO expert. We can work with you to determine which term of your new construction financing is the most profitable for you.