Are you looking for a favourable follow-up financing for your real estate loan? If so, a forward loan is worth considering. We will explain to you the advantages it offers and what you need to bear in mind when making your selection.
In times of low interest rates, many borrowers are considering how they can take advantage of the currently favourable conditions for their long-term home financing. Many banks offer fixed interest rates only for a limited period of 10 – 15 years. If you do not manage to repay your loan within this time, you will have to repay the remaining amount at worse terms. Therefore, one should think about a favourable follow-up financing.
One way of doing this is by means of the forward loan.
A forward loan is a special form of annuity loan with which the disbursement date can be postponed for up to five yearsinto the future. This means that the borrower can secure favourable interest rates for the follow-up financing long before the end of the existing fixed-interest period. Thus, a forward loan offers a large advantage compared to a conventional follow-up financing, which one can apply for at the earliest 6 to 12 months beforehand.
The whole thing works like this: As soon as the fixed-interest period of the first financing bank ends, the new bank transfers the existing residual debt to it. The borrower then pays off his home loan with the new bank at the favourable interest rate.
A forward loan is particularly recommended if interest rates are expected to rise in the long term. It is also suitable for all those who are unable to repay their loan debt within the fixed-interest period.
Forward loans are available at very different conditions. When making your selection, you should pay particular attention to the following aspects:
As such, it is always advisable to compare the various providers in advance. It is often the case that not only your local bank has attractive offers. For a comparison, you can use the Hypo-Help Calculator and the Interest Check for example.
If you have any further questions, you can contact our consultants at any time. They will be happy to discuss the various options for your follow-up financing, and help you choose the right offer.
Would you like to clarify your questions personally with a financing expert? You can reach us during business hours via the telephone instant advice service at the following number.
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