Refinancing becomes a burden: What owners can do now

Many homeowners financed their house or apartment years ago at favorable rates. When the agreed fixed interest rate expires, the new monthly payment can suddenly be significantly higher. This puts even households with previously sound financial planning under pressure. However, those who act in time can explore various options before a strained situation turns into a financial crisis.

Why refinancing in 2026 could be more expensive

Those who took out a mortgage in 2016 often benefited from comparatively low interest rates. After a ten-year fixed interest period, many will need to refinance in 2026. If the interest rate offered today is higher than the previous rate, the monthly interest costs on the remaining loan balance will increase.

The extent of the impact depends primarily on the outstanding debt, the new interest rate, and the agreed repayment schedule. Even a difference of just a few percentage points can significantly strain the household budget. Added to this are often increased expenses for energy, maintenance, and everyday living. Homeowners should therefore not rely solely on the offer from their current bank, but should calculate and compare options early on.

What options exist between new financing and sale?

Refinancing doesn't necessarily have to be arranged with your existing bank. Offers from other banks may provide better terms. Adjusting the repayment rate or extending the loan term can also lower the monthly payments, although this may result in higher overall costs.

Those with savings can check whether a partial repayment reduces the outstanding debt. Sufficient funds should be left available for unforeseen expenses. If the end of the fixed interest rate period is still pending, a forward loan, which allows you to secure favorable terms in advance, may also be an option. Whether this is worthwhile depends on the costs and your personal expectations.

If these options are insufficient, a planned sale of the property should also be objectively examined. It could make it possible to pay off the loan and regain financial flexibility. The crucial factors are the expected sale price of the property and what liabilities and selling costs need to be considered.

Make timely decisions instead of selling under pressure

Those who only react when payments are missed often lose valuable time and negotiating leverage. Selling under time pressure can lead to a property being offered or sold below its potential market value.

It is therefore advisable to review the outstanding debt and available household budget early on and discuss viable solutions with the bank. Consulting an independent financial advisor can also help to carefully and objectively evaluate offers and long-term risks before making a final decision. A professional property valuation can further help to assess selling as a genuine alternative. This allows for a well-considered decision as to whether the property can be retained or whether an orderly sale is the better long-term solution.

If your refinancing becomes a burden, we will help you realistically assess the potential market value of your property. Together, we will discuss whether selling in a timely manner might be a sensible option for you.

Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

Photo: © Wordliner/Image created with OpenAI's ChatGPT

NOT_VER_9