10 years (0.99%) or 15 years (1.40%)?

If you borrow that much, it depends on how long you need to pay it off. I don’t know your salaries or planned inheritance, etc. But basically, you should opt for at least 20 years. Unless you both earn a net total well over 10,000 euros per month or have a large gift coming your way...

Why should you basically do that? I’m looking forward to the answer. I’d like to be enlightened, but if you look at the construction price indices of the last 20 years (I didn’t find any others quickly), everyone who chose a 10-year fixed interest saved money. That means everyone who signed up for 15-30 years refinanced after 10 years and thought “well, it didn’t quite work out, but at least I could sleep peacefully.” 5-year fixed interest would have been even better, but of course, you really need nerves of steel for that. I’m open to criticism; I just don’t like sweeping statements. You also have to consider what banks are thinking with the different loan terms.

: I would be interested to know what you have decided now and why? Waiting and saving? Will the ratio of loan to salary ever change? If you now forgo everything in the next few years to build up a lot of equity (maybe max. 18,000-20,000 p.a.), you could have afforded the house. In 3 years you will have saved 50,000-60,000 and after deducting the inflation rates for land/house you will probably only have half more than before. That makes 50 euros less loan than before. Of course all speculation but I think you are not doing anything else anyway.

On the one hand, we are scaling down (maximum total investment of €500,000) and simply let the loan run longer (20-25 years). During the term, we will repay as much as our life allows through special repayments. Furthermore, we will receive €24k in child construction allowance.

Then, in our mid-50s, there will still be a manageable amount of about €100k - €120k left. And we will probably be able to pay this amount from parts of our joint inheritance.

Our maximum desired installment will be around €1,200. That would be 2% repayment.

This “installment” would be roughly equivalent to the cold rent for a 4-5 room apartment or small house in our region. Meaning that we would have to pay this amount anyway, whether ownership or rent.

An own house simply should not determine life. You say your wife always wants to work 70%? My wife works just as much and it is terribly exhausting and stressful, even with one child. What happens with child no. 2 or even twins?

On the one hand, we are aiming smaller (maximum total investment of €500,000) and simply extend the loan term (20-25 years). During the term, we will repay as much as life allows us by making special repayments. Additionally, we will receive €24k in Baukindergeld.

Then, in our mid-50s, there will still be a manageable sum of about €100-120k left. And we will probably be able to pay this amount from parts of our joint inheritance.

Our maximum desired installment will be around €1,200. That would be a 2% repayment.

This "installment" would roughly correspond to the cold rent for a 4-5 room apartment or small house in our region. Meaning that we would have to pay this amount anyway, whether owning or renting.

Huh? How exactly does your project differ from ours? Except that yours relies on a lot bigger ifs and buts. If we repay only 2% instead of 3% (which is always possible), we have an installment of €1,240. What’s healthier about that? If you repay 3%, you still can’t afford the house? We can also just do that if we want to be finished not at 58 but at 63 years old (which is an option). So that argument already falls away. Special repayments as much as life allows are naturally also a very risky thing. Just like relying on a firmly planned inheritance (keyword care). We could factor that in too, but I would find that anything but healthy. If the inheritance comes, then we’re done, and if not, we will have paid it off a few years later.

By the way, a 110 sqm apartment here costs about €1,300 cold rent and therefore €1,500 warm rent.

No offense intended, but simply repaying less because money might come from somewhere sometime and if there’s leftover money then there’s a special repayment and if not then not, hasn’t really convinced me.

PSD, but that was already 3 years ago.

That means in the year 2015?

That means by 2022 at the latest you will know whether you have paid about 25,000 euros too much in interest (assuming you financed 400,000). That means as long as the 10-year interest rates are below 1.40% in 2022/2023 you will refinance and the 0.77% would have been the better alternative. Due to the current interest rate situation and economic conditions, I assume that this will happen. Then it’s just 25,000 over 10 years too much for peace of mind. You can do it, but you don’t have to.

Huh? In what way is your project different from ours? Except that yours consists of much bigger ifs and buts. If we repay only 2% instead of 3% (which is possible at any time) then we have a rate of 1,240 euros. What is healthier about that now? If you repay 3% you can’t afford the house again? We can also simply do it if we want to finish at 63 years old instead of 58 (which is an option). So that argument is already invalid. Prepayments as much as life allows is of course also a very dangerous thing. Just like relying on a fixed planned inheritance (keyword care). We could also factor that in, but I would find that anything but healthy. If the inheritance comes, we’re done, and if not, we pay it off a few years later.

By the way, a 110 sqm apartment here costs about 1,300 cold rent and accordingly 1,500 warm rent.

No offense but just repaying less because money will come from somewhere someday, and if money is left over then there’s a prepayment and if not then not, didn’t really convince me.

How is it different? We will need about 100k less than you.

I don’t have to convince you either. This will simply be our way – to have more money left in the good, young years with our children instead of putting it into the house.

And we will inherit various properties – you can’t take care of them all anyway so they wouldn’t all be gone. And if not, the remaining amount is also easily financeable.

But that’s just how it goes with family – become a father yourself and your perspective on things will be completely different.

I don't have to convince you either. This will simply be our way - in the good, young years with our children to have more money left over instead of putting it into the house.

And we will inherit several properties - you simply can't maintain them all so that they would be gone And if not, the remaining amount is also easily financeable.

But that's just how it is with family - become a father yourself and your perspective on things will be completely different.

I still don’t understand. You say 1,700 is too much with 3% amortization. By the way, it’s “only” 1,630. Let’s assume I agree with you here. Now you argue that you only amortize 2% and are thus cheaper. So then I’ll do that now too if we have children. I’ll only pay 1,250 euros because I simply repay less and, in your opinion, have a healthier financing. The inheritance is coming too. I only said we start with 3%, what we do after 3-6 years with children we can still decide then. We are not bound to 3%.