How to protect yourself from high credit costs

Expensive follow -up financing

This is how you secure your home despite rising interest rates

The time of the cheap loans is over. And that hits homeowners particularly hard. How you can now protect yourself from expensive follow -up financing.

Many property owners will face a financial test in the coming years. If your loan is binding, follow -up financing can become significantly more expensive. This is indicated by the Schleswig-Holstein (VZSH) consumer center.

Since mid -2022, construction interest rates have risen sharply and are now usually between three and four percent – after years in which many households have completed loans with less than one percent interest. For owners, this often means a doubling of the interest burden. The VZSH explains what property owners can do in this situation.

“Many consumers are amazed when they get the specific numbers,” says Michael Herte, financial expert at VZSH. “In the meantime, 1.5 percent interest has now become more than 3.5 percent. In many cases, this doubles interest load and significantly increases the monthly rate.” Those who have not already repaid a large part of the loan have had to be adjusted to significantly higher monthly installments, Herte said.

The increased annuities often apply to stagnating income and higher living costs. Families in particular come under pressure, for example when a parent works for part -time childcare and the budget budget is already burdened by inflation anyway. The combination of higher interest rates, constant income and increasing expenses can lead to financial bottlenecks.

It is all the more important to act in good time. The VZSH Rät Rät at the latest six months before the expiry of the borrowing binding to check the possibilities of follow -up financing. This includes forward loans, prolongations (extension of the existing loan) or debt rescheduling.

With a forward loan, for example, you can already secure the conditions for follow-up financing in the future. So you now agree the interest rate for a loan that will only be paid out after your current interest rate binding.

According to financial expert Michael Herte, an honest inventory is just as crucial: Are income and reserves enough to bear the higher rate in the future? Does the repayment have to be adjusted or the term extended?

“In some cases, a fundamental restructuring of the financing is inevitable,” said Herte. If it becomes clear that the property can no longer be financed permanently, it advises on a free sale in good time. “Timely sales are almost always the better alternative to auction.”

If you feel unsafe, you shouldn’t hesitate to take advantage of professional advice. Your existing bank is often the first point of contact. It can make offers for prolongation of the existing loan and respond individually to your previous payment data.