Wednesday, March 22, 2023

How uncomfortable is it for real estate owners?

by admin
0 comment


Jasin Isik, Managing Director of Suissekasse GmbH from Seegräben ZH, warns in a statement of upcoming foreclosures.

Mortgage interest rates have risen sharply in the past year. For ten-year fixed-rate mortgages by around 2.5 percent, the financial and pension consulting company SuisseKasse from Seegräben ZH calculates. This is based on the benchmark interest rates of the 50 most important credit institutions, as stated in a statement.

That’s not all: interest rates are likely to rise further in 2023. This makes the situation uncomfortable for many property owners.

Rising costs with lower property values

The problem lies not only in the more expensive construction and purchase financing, but also in the growing rate and residual debt after the fixed time has expired. Jasin Isik, Managing Director of SuisseKasse, explains: “When calculating the affordability of a property, the running costs of the property and the income of the owner are compared. When mortgage interest rates rise, this affordability is recalculated.”

This means that while the remaining debt increases due to the higher interest rate, more income is required at the same time.

If the financial resources are not high enough, there is a risk of foreclosure by the mortgage lender, says Isik. And at a price that has been revised down significantly. In addition, by law, the mortgage lender can demand the outstanding mortgage debt within 30 days.

In the face of such scenarios, some property owners, who have calculated the house purchase rather tightly, are afraid. However, the question arises as to whether Managing Director Isik is not exaggerating here.

Related News

Latest Switzerland News and updates and political news, follow our daily update about the congress and the government roundup, we also provide the latest news from all over the world minute by minute, subscribe to get the latest updates directly to your inbox.

© 2022 All Right Reserved. Switzerland Times