Image: Erwin Wodicka
According to a druchblicker survey, many borrowers are now reaching their limits: every second respondent fears that they will no longer be able to pay their loan installments if interest rates continue to rise. durchblicker surveyed 1,200 people in Austria in May and June.
The cost of a variable loan has risen sharply in recent months. At around 4 percent, interest rates have doubled compared to the previous year, according to the comparison platform. In Austria, with 46 percent of all real estate borrowers, a relatively large number of consumers have variable interest loans. Of these, 53 percent, the equivalent of around 200,000 households, are worried about whether they will still be able to pay for their loans after the next interest rate hike. The European Central Bank (ECB) will announce its latest interest rate decision today, Thursday. Interest rates are expected to be raised again by 0.25 percentage points.
“Switching still makes sense now”
In view of the situation, durchblicker advises switching to a fixed-interest loan. Because a fixed interest loan is now significantly cheaper than a variable interest loan. The interest rate is 3.65 percent for a term of 10 years, 3.80 percent for 15 years and 3.50 percent for 20 years. “If you know that you can no longer afford to continue increasing interest rates, switching to a fixed-interest loan still makes sense, even if it is uncertain how interest rates will develop in the coming years,” says Andreas Ederer, real estate financing expert at clearer, according to the Thursday broadcast.
Interest on savings, on the other hand, is rising much more slowly than interest on loans. Since the beginning of the year there have been hardly any increases in interest rates for savings at Austrian banks, and according to the platform, hardly anything has happened, especially with longer-term investments. For a year of commitment you get a maximum of 3.15 percent fixed interest. With a three-year commitment, it is a maximum of 3.25 percent instead of 3.20 percent in January. New customers receive up to 2.50 percent starting interest for deposits that are due directly, in January it was still 2.0 percent.
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