For many people in Germany, the dream of owning their own home is becoming ever more distant. Not only have interest rates on mortgage lending roughly tripled since January, but high inflation is also having an impact on the granting of loans. In a dpa survey, large banks state that they set flat rates for living expenses higher when checking credit.
They emphasize that the proportion of rejected loans has hardly changed. But buyers are also bringing more and more equity with them because of the rise in interest rates, credit intermediaries are observing.
At Deutsche Bank, for example, higher consumer prices play a role in lending. “Due to the sharp rise in inflation, driven in particular by high energy prices, we had to adjust our minimum requirements for living and management costs as part of the credit rating,” said a spokesman.
Cost plays an important role in how much free income potential buyers have and therefore their creditworthiness. “We recommend the use of sufficient equity and/or – if possible – a higher repayment,” says Deutsche Bank. However, an increased rejection rate is not observed.
Meanwhile, Commerzbank said that not every loan request would be approved. “Increased financing costs and the cost of living mean that it may not be possible to meet every financing request.” It is important to ensure that customers can afford the financing in the long term. “We also take into account current developments such as the increased cost of living due to high inflation.”
The rising energy costs and other expenses influenced by inflation would be “taken into account via higher household allowances”.
The direct bank ING announced that its criteria for the creditworthiness of customers who buy a property as an investment and do not want to live in it themselves have been “slightly stricter since this year”. “We are also currently checking the cost of living in applications,” says the money house. However, the rejection rate has “not noticeably” changed.
Thomas Peeters, CEO of the Bilthouse Group, under whose umbrella the credit broker Baufi24, Hüttig
In addition, the market value of real estate is viewed critically, reports Peeters. “Where previously up to 130 percent of the value was financed, for example for renovation purposes, 100 percent is now more likely to be approved.” Anyone who wants to finance more must expect a sharp increase in the repayment amount. The poorer price prospects for residential real estate also influenced the valuation.
Competitor Interhyp is also observing a change in the behavior of the banks. The lump sums in the household bill for living and management costs as well as the vehicle allowances have been increased by 10 to 15 percent, says Mirjam Mohr, director of private customer business. Some banks also reacted to the stricter requirements of the financial regulator Bafin, which prescribed new capital buffers for residential real estate loans.
Germany’s largest savings bank, Hamburg-based Haspa, on the other hand, emphasizes that it is currently not applying any stricter standards than before, as André Janke, real estate financing expert at Haspa, says. But: The household surplus of the customers is on the decline due to the increased interest rate level and the continued high purchase prices, “so that we cannot meet all credit requests”. As a result of the inflation, the flat rates for the management of the property as well as for the cost of living and mobility have been increased.