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May 2018

Lending rates 2012 as low as never before

Thursday, 01.11.12 , written by Henriette Neubert New Smartphone, Bigger TV or a Faster Car – Anyone who wants to make major purchases and plans to take out a loan should act soon. Currently, lending rates are lower than they have been in a long time. This could change in 2013. >

Kreditzinsen 2012 so niedrig wie nie

In 2012, lending rates in Germany were historically low. This is mainly due to the current interest rate policy of the European Central Bank (ECB). To lower the interest burden on the crisis countries, the ECB has lowered its key interest rate to a record low. Currently, it is less than one percent at 0.75 percent – For comparison, in 2008, he was over five percent. This makes lending cheaper for commercial banks and thus for the consumer. Installment loans are currently available, for example, for a borrowing rate of 5.84% pa, including easycredit.

Because of low interest rates, the savings rate is falling

Not only the interest on loans is low. Also, the interest for savers is currently so low that it hardly compensates for the inflation rate and thus makes savings a loss. Therefore, the savings rate in Germany has fallen since 2008 from almost 12 percent to 10.5 percent. That is, the Germans are currently spending their money rather than saving. In addition, more and more people are investing in real estate – largely credit-financed. This seems to be the best way to protect yourself from impending inflation.

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Threatens a real estate bubble in Germany?

The flight into the real estate market shows parallels to the development in the US until the beginning of the real estate crisis: Extremely low lending rates for real estate and a low savings rate. The first experts, including the chief economist of Helaba, Gertrud R. Traud, in the world warn against a real estate bubble in Germany: “Should the price increase in real estate continue, overheating in submarkets can not be ruled out. Then the flight to the supposedly secure investment property would become a trap. “

However, the German savings rate is still far from the American. At the height of the real estate boom in 2005, this amounted to only 1.3 percent.

The key interest rate will rise again

If the low base rate and high demand for credit remain, money will continue to be pumped into the economic cycle in the near future. This increases the actual risk of inflation. In order to prevent this, the ECB will have to raise its key interest rate. So it may well be that after 2012 with the low interest rates is over. However, the rate hike is expected to remain contained in the coming year. As long as Spain, Italy and other crisis-hit countries continue to struggle with the financial crisis, the ECB will not significantly raise key interest rates. Experts believe that a rise of 25 basis points in the coming year is realistic. That should remain manageable for most borrowers. The Federal Association of German Banks (BdB) even anticipates no change (finanzen.net)

But regardless of whether you want to raise a loan in this year or next year, a detailed comparison of the offers always makes sense. Not only is the borrowing rate important, but above all the annual percentage rate of interest, as it also includes fees, commissions, etc., which can vary greatly from one bank to another.

Loan rate:

Basically, a (credit) interest is the charge at which a creditor lends money to a debtor. The interest should fulfill different functions. In addition to the “price” for the money borrowed, there is a risk premium for the possibility that the money can not be repaid. It also includes inflation compensation and the opportunity cost of money. The former is to compensate for the loss of purchasing power through inflation, the second is a compensation payment against a lost profit, if the creditor had invested his money elsewhere.

Thus, the creditworthiness and the term of a loan for the interest calculation play a crucial role. The interest calculation is based on a risk-free interest rate (ie the interest rate for a debtor with the highest credit rating, for example government bonds) over the same term. This is based on the key interest rate of the ECB. For this purpose, the surcharges will be added. The lending rates differ between the individual banks as they weight the criteria differently and assess risks differently.

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  • Henriette Neubert
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News Pension contribution 2018 officially falls to 18.6 percent

News Pension contribution 2018 officially falls to 18.6 percent

finanzen.de News always well informed

Monday, 23.10.17 , written by Anja Schlicht The good employment situation in Germany not only means that the average contribution to statutory health insurance will fall in the coming year. Employees will also be relieved of the pension contribution in 2018. Because the Federal Cabinet has now decided to adjust the contribution rate from 18.7 percent to 18.6 percent. >  Employees will be relieved of the pension contribution in 2018

  • The pension contribution will fall in 2018 to 18.6 percent.
  • The reason for this is bubbling revenues from rising wages and a strong increase in employment.
  • The contribution to the miners’ pension insurance also drops to 24.7 percent.

The pension contribution will fall in 2018. This was decided by the Federal Cabinet on 22 November. Because the improved employment situation and rising wages, the statutory pension insurance takes more money than expected . Already in the run-up, both the circle of annuities and the chairman of the board of the Deutsche Rentenversicherung, Alexander Gunkel, had thought it possible to lower the pension contribution by 0.1 percentage points to 18.6 percent.

Employees will pay only 9.3 percent of their gross income in the pension fund by 2018 instead of the previously 9.35 percent due to the lower pension contribution. The same applies to employers.

Originally it was planned to leave the contribution rate for statutory pension insurance unchanged at 18.7 percent until 2021. After that, an increase to 18.9 percent was planned. Now, the pension contribution should remain at 18.6 percent until 2022 and then gradually be adjusted to 21.6 percent by 2030.

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When will the pension contribution 2018 be adjusted?

By law, an adjustment of the pension contribution is provided if one of two conditions is met: If the reserves of the pension insurance at the end of the year at less than 0.2 monthly expenses, the contribution must be screwed up. However, if the so-called sustainability reserve exceeds the upper limit of 1.5 of the monthly expenditure, the contribution rate drops . According to the Federal Cabinet, the reserve currently amounts to 1.59 monthly expenses. By the end of 2017, it should be around 32.9 billion euros.

The lower pension contribution in 2018 not only relieves employees and employers slightly. The federal government could also reduce its subsidy to the pension fund by around 200 million euros. In addition, pensioners could benefit from a better pension adjustment in 2019.

In advance, it was speculated whether the government decides for a short-term contribution relief. Finally, the pension fund is under pressure not only because of expensive laws such as the mother’s pension and the pension at 63. Demographic change will also severely impact statutory pension insurance over the next few years. The better the reserves are handled, the sooner future increases in contributions can be absorbed.

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  • Anja Schlicht
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