Mortgage loans

What does the “mortgage” mean?

The term mortgage is derived from the Greek and is synonymous with “pledge”. The mortgage is a limited right in rem over a property and is thus one of the mortgages. Purpose of the mortgages is the securing of granted loans in the event that claims by the debtor (guarantor) not serviced as planned. The essential distinguishing feature of the mortgage is the requirement of a personal claim against the debtor.

In general practice, this is a loan to finance a property. The mortgage changes through every debt-discharging payment of the debtor. Although the original amount is entered in the land register, it is not necessarily stable in contrast to the land charge. Decisive is the actual debt.

Mode of operation and prerequisites

For real estate financing, a mortgage loan is taken in most cases. The mortgage is a condition that must be accepted for the loan. The risk of losing the property to the bank, however, is extremely low.

What is a mortgage loan?

As the name implies, it is a loan linked to a mortgage. The majority of Austrian banks only offer this type of loan as part of real estate financing. If there is insufficient collateral available, such as other real estate or equity, the lender secures itself against the insolvency of the borrower with a real estate lien. The bank will be entered in the land register with this right. If the borrower is insolvent, they can balance the outstanding loan amount by pledging the property in a foreclosure auction, an execution is carried out.

What requirements must be met for the mortgage loan?

As part of real estate financing, banks typically assume that 30 percent of the total amount needed is equity. In addition, the value of the mortgaged property is determined. This forms the basis for the mortgage lending amount, ie the loan amount. The creditworthiness of the borrower, which is verified by means of a bank statement, as well as a sound financing plan also influence the decision to lend.

How does the mortgage loan work?

Once the loan has been approved, the creditor is entered in the land register. The debtor has to pay 1.2 percent of the deposit amount for fees. If the entire loan amount is repaid, the mortgage lapses. If the property is resold before the loan is repaid, it will remain in place, reducing its value. Alternatively, the loan may be repaid early if there are appropriate contractual arrangements with the bank. If the loan is repaid, a release of the land must be requested. In addition to banks and building societies, insurance companies can also act as lenders.

What additional loan costs are to be scheduled?

In addition to the actual loan amount and the entry in the land register, the borrower has to pay interest for the money lending as well as land transfer tax. In addition to the loan, an average of 10 percent of the purchase price is incurred as incidental purchase costs.

How to calculate mortgage loan?

Mortgage loans are in almost all cases annuity loans, ie loans with consistently high rates.

In European countries so-called fixed interest loans are common. With this type of loan, you agree with the bank a fixed interest period in which the amount of interest does not change. This creates predictability and thus security for the borrower.

This calculator serves as a guide to quickly get an overview of the costs and terms of a loan. Depending on the input, the calculator automatically calculates the progress of the financing and creates a repayment plan and an overview of the most important key figures.

Please note that the interest proposed on websites is only an example. For an accurate interest rate information please use our inquiry form.

Mortgage calculator: calculate mortgages online

Calculate mortgage financing quickly and easily. Already with few details calculates the calculator the possible interest, the term of the loan and calculates the total amount of interest paid. The printable repayment plan shows the course of the mortgage loan with all interest payments and repayment installments.

It should contain the following information:

  • height of monthly rate
  • Term of the financing
  • Non-binding interest indication detailed
  • Repayment schedule

Real credit – the royal route of the mortgage loan

Real loans are purposeful and object-linked long-term loans for real estate financing, which are secured by entry of a first-ranking mortgage in the land register within the mortgage lending limit. Mortgages and land charges serve as mortgages. The mortgage lending limit is a percentage of the mortgage lending value, the amount of which depends on the credit policy of the respective institution.

A 60% lending limit applies in the banking world as a 1a loan and thus receives the advantage of the most favorable interest condition. The mortgage lending value corresponds to the value attributed to a real estate or equivalent right by a credit institution. Equal rights are, for example, hereditary building rights or even residential property, which arises from a real division of a residential building in the land register.

The first-ranking of the lien secures the lender a satisfaction of his claims in the first place. Any subsequent right will only become relevant after satisfaction of the priority.

Loans or parts of loans used to finance the financing requirement exceeding the mortgage lending limit are only considered as real credits if they are secured on the one hand for purpose and property and on the other hand secured by a guarantee from the public sector. These loans are referred to in the parlance as 1b loan or 1b mortgage. Exemplary here are the funding programs of the countries or the KfW promotional bank called.

Loans that exceed the mortgage lending limit are called blank. If this part of the loan is secured by a second-rate mortgage, this is called a covered installment loan.

Some institutes refrain from splitting the loan in the sense of real collateral and offer the financing of the purchase price by means of a mixed calculation and in some cases including the incidental purchase costs. Of course, building finance without equity is more expensive than financing within the mortgage lending limit. In addition to mortgage or mortgage protection, institutions also require personal submission to foreclosure in addition to real property if it is necessary.

What are the basic features of the home loan?

In addition to mortgage or mortgage collateral, a mortgage loan is essentially characterized by the fact that the borrower only receives this loan if his credit standing is relatively good. The Schufa must not contain any negative characteristics and also a regular income must be proven. Overall mortgage lending terms averaged between 20 and 30 years, with the same loan rarely being used throughout the repayment period.

Fixed interest rate and variable interest rate

Even though it often takes up to 30 years for a real estate loan to be fully paid off, there are usually several follow-up loans over the years. Because often the borrower concludes a fixed rate mortgage loan for five or ten years (fixed interest rate), and must renegotiate the interest rates after this period, or even change the bank. Alternatively, it is also possible with the mortgage loan to make the interest rate variable.

Secure low interest rates with the mortgage

Finally make his wishes come true. Buy or build a house. Or renovate or rebuild your own property. All this you will finance with a mortgage loan. As security serves your property. For this you get the mortgage loan for special conditions.

The benefits of a mortgage loans:

  • Cheap financing through mortgage security
  • Good planning due to constant installment height
  • Long-term low interest rates
  • A mortgage gives security

The mortgage loan is the most common form of financing real estate. Your property serves as collateral for the loan. We enter a mortgage on your property in the official land register. Also called mortgage. Due to the high level of security, we offer you financing at very favorable conditions.

Safety in planning

The monthly total mortgage rate is composed of an interest and a repayment installment. With the fixed-rate mortgage, the rate remains the same over the entire term. This means that you plan for a long time and keep a good eye on your finances.

Initially, the repayment of your loan is still low. However, the longer you pay off, the more the interest rate on the monthly installment decreases. Your repayment share goes up for it.

Currently low interest rates

Due to the financial crisis, the current key interest rates are at a very low level. A clear advantage for all home builders. Because the cost of mortgage lending are thus significantly lower than a few years ago. You want to build, buy or renovate soon? Then get the low interest rate now. Because in a few years, the interest rates are likely to rise again.

Safety through constant rates

Building a house or buying an apartment – with such a project you can not always foresee everything. A good dose of security brings you an annuity loan. In this classic of mortgage lending rates are the same over the entire term. You can plan well with that.

The advantages of an annuity loan:

  • Your financing is easy to see
  • You pay fixed installments until the end of the loan
  • Your repayment will be charged immediately
  • You have long-term fixed borrowing rates

Loans with always same rates

You usually finance your own four walls for a long time. If you want to reliably plan your mortgage over the entire term, an annuity loan is handy. The rates remain the same until the end. So you can calculate your budget well.

Incidentally, the annuity loan is a form of mortgage loan.

Fixed interest gives security when planning

The interest rate for the financing of your property is fixed at the conclusion of the contract for a certain period (fixed interest period). The amount of the interest rate remains unchanged over the entire fixed interest period. Regardless of how the interest rates develop in the market.

What is the annuity payment ?

The rate of your annuity loan (the annuity payment) is made up of an interest and a repayment installment. With always same rates, the portion of the repayment increases in relation to the interest payment constantly. This means: in the beginning you pay more interest, at the end of the loan almost your entire installment goes into the eradication.

Because the interest rate and rate are fixed, you always know exactly how your repayment is and when your loan is repaid. So you can plan your real estate project well from the start.