What you should know about loan repayment increases: All customers need to know

The impact of rising interest rates: the ECB’s view

The European Central Bank (ECB) recently raised interest rates, a decision that has direct implications for the real estate market. Understanding the ECB’s movement is essential for those considering a property investment or home loan.

Understanding the movements of the European Central Bank

The ECB adjusts interest rates in an attempt to control inflation and stabilize the economy. A rise in interest rates usually means the economy is doing well, but it can also increase the cost of borrowing for individuals and businesses.

How will this affect the real estate market?

With higher interest rates, borrowing becomes more expensive. This may lead to reduced demand for real estate as potential buyers may be deterred by increased borrowing costs. Consequently, sellers may face a new reality where selling their property could be more difficult.

Sellers are facing a new reality

In a real estate market where interest rates are rising, sellers must adapt. This may mean that they have to be more flexible in their prices or offer additional incentives to attract buyers.

A decline in investment transactions: a change in direction

Rising interest rates have also led to restrictions on investment transactions. Faced with an unprecedented situation, investors are beginning to rethink their strategies.

Investors are facing an unprecedented situation

Investors have always played a vital role in the real estate market. However, with higher interest rates, they now face higher borrowing costs, which may reduce their return on investment.

Speculative transactions are declining, why?

Rising interest rates make speculative trading less attractive. Investors are less likely to buy properties in the hope that their value will increase because the cost of financing these investments is now higher.

Power changes sides

As investors exit the market, first home buyers gain more power. They are now in a strong position to negotiate more favorable terms.

The Rise of New Home Buyers: A Different Battleground

First-time home buyers are at a long-term disadvantage in the real estate market. However, the momentum seems to be shifting in their favor.

Opportunity for new buyers

With investors and speculators less active in the market, first home buyers have more opportunities to buy. It is an opportunity for them to realize their dream of owning their own home.

Do buyers really dictate the rules?

No, buyers don’t dictate the rules, but they certainly have more bargaining power than before. Sellers facing lower demand may be more willing to negotiate price or offer concessions to close the sale.

Retailers and the era of flexibility: new challenges to face

Retailers are facing a new reality where flexibility is paramount. They need to rethink their sales strategy to attract buyers in a market where loans are more expensive.

More flexibility, more sales?

Being flexible can help salespeople close the sale. This may mean negotiating the price, offering purchase incentives, or even changing the terms of the purchase agreement to make the transaction more attractive to the buyer.

Discounts, an effective strategy?

Offering discounts can be an effective strategy for selling a property in a high interest rate market. However, sellers must ensure that they can afford to lower their price and still make a reasonable profit on the sale.

Vita Kazėnienė’s advice for obtaining a real estate loan

Director and credit expert of VisiBankai.lt Vita Kazėnienė offers valuable advice for those who want to take out a home loan in the current environment of rising interest rates.

Expert tips for a successful loan

Kazėnienė advises prospective borrowers to fully understand the terms of their loan and to allow for the possibility that loan repayments will increase in the future. He also suggests caution when taking out a variable-rate loan, as rising interest rates can significantly increase repayments.

How VisiBankai.lt can help future borrowers

VisiBankai.lt offers a number of services that will help potential borrowers navigate the credit market. This includes interest rate comparison tools, debt management advice and resources for understanding mortgage terms.

Rising loan repayments: how to prepare?

Preparing for increased loan payments involves understanding the terms of your loan and planning ahead. This may mean creating an emergency fund to cover additional costs or looking for other financing options.

Finally, the interest rate hike by the ECB has been a game changer in the real estate market. First-time home buyers have more opportunities, sellers need to be more flexible, and everyone in the market needs to adjust to more expensive credit terms. By staying informed and planning ahead, everyone can navigate this changing market