Fixed-interest loans (fixed-rate lending)

In the ECB’s statistics, loans from banks with a fixed-interest period of five years or more. – In Germany, these account for more than half of all loans, especially for private housing construction. This, in turn, contributes significantly to the stability of construction financing and also to the comparatively low proportion of non-performing loans in the group of loans for residential construction. – In the USA, a good three quarters of all residential construction loans had variable interest rates when the subprime crisis broke out, and the default rate here was forty percent. By contrast, the default rate for fixed-rate housing loans in the USA was only around twenty percent. – Fixed-rate agreements came under criticism on various occasions; they were branded as a barrier to mobility. But every longer-term contract and the security it provides is a selfevident consequence of a barrier to mobility everywhere. – By the way, this is also true at least for the normal case (in a normal case) for a long term contract of family-law relationship also called marriage (matrimony). – See building societies, mortgage lending value, land credit institution, fixed deposit, fixed term, real estate price, spread of conditions, long-term culture, prenumeration reservation, social mortgage bond, prepayment penalty, housing loan.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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