In this article you will get a detailed overview of the current interest rate trends and the interest rates that are usually due on loans.
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In this article you get a detailed overview of the current interest rate development and the interest rates that are usually due on loans. We will also go into the various terms, explain them in an understandable way and explain how interest rates are currently developing and whether it can make sense to take out a loan at the current time.
What is to be understood by the term Euribor?
Euribor is a common abbreviation in the financial market and refers to the Euro Interbank Offered Rate. The Euribor value summarizes the average interest rates at which European banks lend. Different time periods are considered, these can be between one week and several months. The Euribor value is used as the basis for all interest-bearing financial products. These include mortgages, savings accounts, or even futures and interest rate wraps.
Currently, one can distinguish between 5 different values of the Euribor on the financial market. These are the Euribor for the period of one week, one month, three months, six months and 12 months. The interest rate for the period of one day is called Eonia. In general, it can be said here that the Euribor has always fallen in recent years, which also explains the falling interest rates on savings balances.
Another important key rate in the financial sector is the key rate of the European Central Bank, in short the ECB. The ECB is responsible for keeping prices stable in the European market. This means that inflation should be around 2 percent and no higher. The pricing policy is controlled by the key interest rate. This is the interest rate that all banks in Europe pay when they borrow money from the ECB. The ECB's key interest rate thus has a strong impact on Euribor.
How are interest rates currently performing in Europe?
So interest rates in Europe are clearly influenced by the European Central Bank and its key interest rate. This is currently at 0 percent. When banks store money with the European Central Bank, they even have to pay penalty interest of 0.5 percent for it. Therefore, the loans are currently issued very cheaply, because the banks then earn interest on your money and do not have to pay to the ECB. Therefore, currently also very low interest rates are paid on balances on savings accounts or daily allowance accounts.
Currently, it is also so that the ECB currently has no intention to raise the key interest rate, which in turn means that borrowing money remains cheap for now and there is little interest on saved assets.
Should you currently choose to borrow?
In the near future, the ECB will not raise the key interest rate, so loans remain cheap. However, it is also not expected that interest rates will fall further. Therefore, in the current situation, it is advisable to take out a loan and invest the money in investment properties such as your own property. So if you need money for an investment, you can borrow it from banks in Europe at very favorable conditions in the current period. But it depends here also on the type of loan.
It should be noted that the interest rates for an installment loan bspw. are significantly higher than those for a construction loan. This is due to the fact that banks are more willing to grant loans for real estate than for other consumer goods. Because in the case of real estate, it is always available as a value for the bank.
Who is currently looking for a loan or instant loan, should definitely first compare the conditions and interest rates of the providers. A corresponding comparison for instant loans can be found u.a. on the internet on instant credits.at or other websites.
What are the current interest rates and how will interest rates evolve?
Currently, it can be seen for some time that both the development of interest rates in the investment sector and loans is the same. While the different interest rates for each product vary, the same trend is evident here. Thus, the interest rates on borrowed money are low and so are the interest rates on invested money.
In the field of interest rates for mortgages, it is expected that they will remain low. Because as long as the prime rate is at 0 percent, there is no reason for banks to raise interest rates on construction loans. Generally, however, the actual value of a property and the risk of default are always taken into account in the bank's lending decision. In the area of installment loans, on the other hand, a slight increase can be expected over the next few years. Since banks are more likely to lend money on real estate and land than on consumer durables, since the equivalent value to the bank is simply higher and more lucrative.