Lowest home Loan interest RateLeast Own Home Loan Interest Rate
Indeed, the cause of this phenomena can be attributed to the pair's interest rate on mortgages, which was taken up several years ago. For Europe, these interest rate variables are computed on the basis of the Euribor (Euro Interbank Offered Rate ) to which each institution contributes its own margins (1.5-2.0%).
As the Euribor is subject to constant volatility, even purchasers of variable-rate debt take certain risk. There is no warranty, for example, that this pair will not pay 2-3% or more per year in a few years, according to what happens with EU interest rate. Lending at set interest dates is more usual in some EU Member States such as Germany.
Buyers who take out a 15 year loan at 1.9% per year in Germany today can be sure that they will be paying the same interest rate in 10 years - if credits become cheap there is a way to re-finance, but that's a completely different matter. Variable interest may in some cases be lower than firm interest and attract risky debt.
In Denmark, for example, interest rate levels are by no means set at zero. Japan, Switzerland, Finland, Germany and Luxembourg are the lowest land rate mortgages per April 2016. Due to low levels of investment and high solvency, these economies have such low interest levels. Japan's figure is only +0.30% and Switzerland's minus 0.90%.
Let's take Russia as a comparison: rate of Inflation is +7.30% and the median rate of interest on mortgages is 13.00%. There are few commercial credit institutions in Japan and in most cases they need a fixed address or nationality and an annuity of 2-5 million Danish francs (Japanese yen) or 18,400-46,000 dollars.
It is customary in Switzerland and Germany to repay the capital at the end of the interest and credit period. Borrowers in Germany must make at least 20,000 euros a year and the amount of the loan may not be more than 35% of their salaries. Sometimes in Finland bankers are willing to lend at LTV 100% in return for extra warranties and insurances.
Luxembourg offers credit with a LTV limit of 80%, which can be extended for up to 30 years. Purchasers in Europe must prove that they have money, earnings, expenditure (rent, maintenance, other credits, etc.) and ownership in order to obtain a hypothec.