German mortgage, fixed rate 4.75% for 15 years, how to get better rate

L

LouisCribben

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In 2006 in the peak of the property bubble, I released equity on my house to part fund an apartment in Germany as an investment.

A German bank gave me a mortgage fixed at 4.75% for 15 years.
Sounded good at the time.

Obviously 4.75% is a lot to pay at the moment.

I wonder can anyone tell me if I have any options to get on a lower rate.
Would I be just wasting my time ?
 
Breaking a 15 year fixed rate would be very expensive,perhaps obscenely so...have you enquired how much to break? This will inform any decision you make about looking at other lenders,banks are gonna start pushing up interest rates themselves (regardless of ECB) so in a years time that 4.75% fixed for 15 will look very very good.
 
I will eventually figure out the terms and conditions of the mortgage with the help of my German dictionary !

Hopefully someone on this forum can make a best guess about what the likely penalty might be for me to break the fixed mortgage agreement.....
4.75% fixed for 15 years is good for the bank, it's well above the ecb rate, naturally they would need compensation.

I take Knuttels point that perhaps 4.75 fixed for 15 years may look good a year or two from now..........at the moment it looks bad though
 
LouisCribben have you contacted your bank in Germany to ask them what the cost of breaking out of the fixed rate would be? Also have you checked to see if you could get a better deal? Or are you basing this on an understanding of the Irish market rather than the German market?
 
so-crates said:
LouisCribben have you contacted your bank in Germany to ask them what the cost of breaking out of the fixed rate would be? Also have you checked to see if you could get a better deal? Or are you basing this on an understanding of the Irish market rather than the German market?
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Point taken So-Crates.
I was just hoping someone who was in the same prediciment as me might be able to give some advice on how to proceed, or to shed some light on situation......yeah of course I can contact the bank....and check for a better deal, thanks for the advice
 
I looked into breaking out of a five year fixed after 3 years (because I intended to sell) and it was going to cost approx 6% of what I had borrowed. The mortgage was for €1,500,000 fixed at 4.95% for 5 years and it was going to cost €90,000.
Believe me that rate of 4.75% is quite good. I don't think you will get rates like that even now if you went looking. The banks all over the world have had to increase there margins to make up for the losses that they suffered. The Irish banks have'nt done this yet because of NAMA and a probadly public outcry, but they will very soon.
 
I was in with EBS this morning discussing whether to take variable or fixed on the mortgage I'm about to draw down on - the bank manager said he personally can see rates rising to about 4.7% or so by the end of 2010, he reckons there will be 2 percentage rises this year - so that 4.75 could look pretty good by the end of the year .... rates arent going to stay as low as they are for much longer ....
 
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When I was offered 4.75% fixed for 15 years, I thought it was really good......which may or may not prove to be the case, time will tell

I was also really surprised that a bank would fix it for such a long period of time

Do Irish banks offer fixed mortgages for 15 year terms ? Anyone know what fixed interest mortgages are on offer at the moment in Ireland ?
 
Renter27 said:
- the bank manager said he personally can see rates rising to about 4.7% or so by the end of 2010, he reckons there will be 2 percentage rises this year -
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Do people still believe what bank managers tell them???

Did the bank manager have any basis for his opinion?
 
You are borrowing at a rate lower than one which the Irish government could secure.

Be happy.
 
Timbo said:
You are borrowing at a rate lower than one which the Irish government could secure.

Be happy.
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We've gone a bit off topic Timbo, but youve raised an interesting point (no pun intended),
What interest rate are the Irish government paying on new loans ?
 
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