Viewing a single comment thread. View all comments

DireFog t1_jeaaubi wrote

Reply to comment by [deleted] in Is it normal to pay an extra 66% of a home loan back to your bank? by TenDogsInATrenchcoat

>Due to the OP using the € I think they aren't playing by US rules at all.

Yes, I am a silly American and did miss that, thanks for catching and good explanation.

I am a bit horrified by how bad this sounds though. If u/TenDogsInATrenchcoat were to take this loan and try to sell their house before 38 years they would instantly owe six figures on top of the principle and be completely screwed, right?

Is it fair to say that this is a bad deal by European standards as well and OP should flip their lender the middle finger and do something else then?

2

TenDogsInATrenchcoat OP t1_jeab96l wrote

Based on the comments I have decided to flip both middle fingers to this bank and look elsewhere. Thank you all for your help!

7

nantuech t1_jeafu3z wrote

>is it fair to say that this is a bad deal by European standards?

Yes. Absolutely.

OP used the Euro symbol, so it may come from a country from the Euro zone. I didn't see more info about the country.

I can't talk for each specific country obviously. But a 38 years loan isn't the norm in a lot of euro countries (more like 20 or 25 max. Can go up to 30 in very specific circumstances). More importantly : the fact that the huge interests are due even with an anticipated reimbursement.

It's the case in my country (in the Euro zone) and very probably in all other euro zone countries : loans can be renegociated, in length and rates. Conditions of the renegociation can be specific to the loan/country (i.e. there may be a cost for the renegociation, that cost can be significant). Given the current level of interest rates, I would be very careful about the possibility of renegociating, and its cost. As there is a chance that interests rates will fall down again in 5,10 or 15 years, which considering OP's time-line would still be early

2