2023-06-06 06:06:17
A house and a bag of debt? When interest rates rise, it’s time to calculate.
Image: Laila Sieber
Rising interest rates pose a problem for homeowners: if higher monthly payments cannot be repaid, the house is often at risk of being sold. What to do to avert this fate.
LDear homeowners, dear debtors! Did you buy a house or an apartment ten years ago? Were you happy that the loans didn’t cost 2.5 percent a year? And were you hoping that interest rates would stay in the basement “forever”? Then you will most likely have a small problem today if the fixed interest rate has to be extended in the next few weeks. May I prove this thesis with an example?
A salaried manager, married with two children, built his own home ten years ago, which cost a total of 600,000 euros. Of this, EUR 170,000 was for the property, EUR 390,000 for the building and EUR 40,000 for ancillary costs such as real estate transfer tax, court and notary’s office. The house is now worth 750,000 euros, so at first glance the family seems to have done everything right. On closer inspection, however, the situation is mixed.
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