What are the best mortgage lenders

Mortgage loan: no-obligation, quick interest rate check

What is a Mortgage Loan?

The mortgage loan is a loan that is secured by a mortgage. With the introduction of the land charge, mortgages have become rare in practice these days. Therefore, the word “mortgage loan” is mainly used as a synonym for real estate financing, even if a land charge serves as security.

In the mortgage loan comparison at Verivox you will find the offer with the most favorable interest rates and conditions.

Mortgage and land charge

Land charge and mortgage are variants of the real estate lien, but the land charge is more flexible. When the loan is paid off, the mortgage automatically decreases and cannot be reused. Likewise, when a loan is granted, the money may only flow into the property. That is why the mortgage is rarely used in practice.

With a mortgage, the lender (usually a bank or building society) can dispose of the encumbered property for administration or foreclosure if the borrower does not meet his payment obligations. Corresponding agreements are set out in the loan agreement. In addition, the bank secures the right of realization by entering the mortgage in the land register.

Annuity Loans: The most popular form of mortgage loan

Banks usually offer so-called annuity loans for real estate financing. The borrower pays annually (Latin "annus" - "the year") always the same installments, which consist of an interest and a repayment portion. Based on the German interest calculation, the interest is extrapolated to the year, so the interest rate is added to the loan agreements with the addition “p. a. ”(“ per year ”). The annuity is usually paid in monthly installments, but quarterly installments are also possible.

Each further installment reduces the remaining debt and thus the amount of interest. At the same time, the repayment portion of the installments increases so that they remain constant. As a result, with an initial repayment of 1 percent, the borrower will not have to repay the loan after 100 years. The higher the initial repayment, the shorter the term. With a special repayment, the term can be shortened and the total loan costs can be further reduced.

Full repayment loans are a special form of annuity loan. Here the fixed interest rate is identical to the term. The complete full repayment loan is paid off during the fixed interest period, so that no follow-up financing is necessary.

Bullet Loans

Annuity loans are a form of amortization loan - these loans are repaid in regular installments. The situation is different with a bullet mortgage loan. During the entire term, the borrower only pays the mortgage interest. The repayment takes place at the end of the agreed term in one sum. A bullet loan is often agreed in connection with a life insurance or a building society loan agreement. In this context, the repayment amount is saved.

Save with a comparison

Real estate buyers and builders who want to take out a mortgage loan to finance their property should first compare the terms and conditions of different banks. Due to the high loan amounts and long terms of mortgage loans, even minimal interest rate differences have a noticeable effect on the monthly burden. The detailed building interest calculator from Verivox determines the exact amount of your building interest for you.

Enter your details in the calculator. If you set an initial repayment of 0 percent, a bullet loan will be charged. A comparison of annuity loans takes place at a higher percentage. The mortgage loan comparison then determines your individual interest rates and conditions with over 400 banks, savings banks and insurance companies. As a result, you will receive the most favorable offer for you, including debit interest, effective interest rate and monthly rate. You can then request the offer without obligation.

Debit interest and APR

The frequency of the installments can affect the debit and effective interest: If the installment is paid monthly, the effective annual interest rate is higher than with a quarterly rate, given the same debit interest. But the interest costs are lower with a monthly installment over the term than with a quarterly one, so that the monthly installment payment is ultimately cheaper for the customer.

Fixed interest rate or variable interest rate

Borrowers have the option of taking out their mortgage loan with a fixed or variable interest rate. A floating interest rate is comparatively risky because it adapts to the cuts and increases in the key interest rate of the European Central Bank and its development cannot therefore be foreseen. Variable interest rates are therefore only recommended in periods of extremely high interest rates, when short-term rate cuts are to be expected, or when the mortgage loan is only taken out for a short period of time. It is common to agree on a fixed interest rate over a period of several years. The fixed-interest phases often last 5 to 20 years, more rarely up to 30 years. The lower the market interest rate, the more popular are inquiries about longer fixed interest periods.

Mortgage Loans and Equity

To determine the possible loan amount, the lender takes the value of the property as a basis. The ratio of equity to loan amount is another important consideration in mortgage lending. Many banks only grant mortgage loans if borrowers make a sufficient contribution (20 or 30 percent of the total costs). In addition, they often offer lower interest rates for loans, the larger the share of equity.

Some credit institutions also recognize the so-called "muscle mortgage" as equity. This involves the borrower's own work in the construction or renovation work, which the bank regards as capital. However, the valuation is not made to the same amount as the costs for comparable craftsmen's services.

Mortgage calculator

More tips on how to use the mortgage calculator on Verivox.de.

Mortgage calculator

Follow-up financing

After the fixed interest rate has ended, the remaining debt can be financed with a new loan from other providers.

Follow-up financing