Assessment of financing scope with 4620 euros net

The demography and the current age pyramid are really great to look at, but they have the disadvantage that they are an absolute snapshot. No one can predict how the birth rate, political developments, immigration, or the economic system will evolve in the next decades. These are model calculations, so personally, I couldn't care less about them. The only question can be what is possible now and in the coming years regarding financing so that you don’t get completely off track. You can't cover all eventualities anyway.

To the OP: there is massive lying about money in Germany. There is parental support, or they act as guarantors. Maybe the parental home is used as collateral. And so on and so forth. It’s the same with cars. Many have the latest ride parked outside and talk themselves into the leasing. I can only advise you to focus on yourselves. The Finanzguru app can go away, Excel or a similar program should come in. List and enter everything. As I have already mentioned. Get an overview of your own finances. Then get rid of consumer debts. As quickly as possible. You will see, your financial situation will improve relatively quickly with discipline.

Regardless of interest rates and future market developments, one unfortunately has to acknowledge one thing. Having your own house, apartment, etc. has grown into a luxury item. When I talk to my parents, this used to be standard! But it was also more or less standard (30 years ago) that you built your house yourself. Yes, with 9% interest, the financial world is somewhat axially shifted. If with just under 5k net income your own place is no longer feasible, I would basically want to emigrate. But there are always possibilities – the question is this: What effort are you personally willing to pay?! Is it your immeasurable dream? Then invest your energy and turn it into self-performance. On YouTube there is now bundled experience one could only dream of 20 years ago. Invest 2 years of time (3-4000 effective working hours), build the 150m2 (yes, you can build for €1400/m2 in Eastern Germany) and in 15 years you will laugh about it.

But the first 5-10 years will be incredibly hard – you should be aware of that. You can also build a house now for €200k. But you have to want it.

Come back down to earth! Just because you supposedly build houses in no time doesn’t mean 99.99999% can (or want to) do that, not even with YouTube.

@TE: Even if there’s no household budget book, there are invoices for every account transaction (trash can?), or the good bank statement. And 99.9999% have that ready at the push of a button (in the past, some people even kept printed versions in the trunk or under the driver’s seat :D ). Then you also know why there’s still month left at the end of the money. ;)

What does the latest pension statement say? Doesn't it also include an estimate with inflation adjustment?

There are 3 figures. 1. Value according to today's entitlements 2. Pension with 1% average increase 3. Pension with 2% average increase The tendency is to recommend calculating with the midpoint of the two increases and 2% inflation since pensions (demographics once again) will rather not increase with the inflation rate. On the topic of living space... I didn't want to hijack the entire thread, but I consider the example of higher space per person to be a statistical side effect, because the rate of single households has been increasing for years purely by chance. Unfortunately, I have not yet found any reasonable statistics comparing living space by household size over the years. But I can say from personal experience that in recent years I have had 22, 33, and 66 sqm per person without changing the apartment. A single person lives just as well in a 2-room apartment as a childless couple. You also like to have a kitchen, bathroom, living room, and bedroom all to yourself. It is even more extreme among elderly people. Many retired women (and in this case really women are meant, because they live longer ;) ) still live alone in single-family houses they occupied 30 years ago with 3 children. Living space per capita is gigantic, but it remains one housing unit. Medical progress will not stop the fundamental development, at best slow it down. A decisive change would only be possible through a significantly higher birth rate (but which factors seriously speak for us reaching an average of 2 children or more per woman?) or significantly higher immigration.

Everything you say is correct. I’m not saying that demographic development won’t have an impact. I’m just saying that it takes much longer than many think. By then, many apartments and houses will have been worn down so much that they are no longer suitable as living space. Then you might have a lot of vacancies, but no one buys them because they are in a dilapidated state. Due to the shortage of skilled workers, major renovations are then hardly affordable or you have to wait three years for them. Lucky is the one who can renovate themselves. Anyway, in any case, in my opinion, it will not suddenly be much cheaper to rent in 30-50 years than it is to have bought today and paid annuities into retirement. But I wouldn’t recommend real estate as an investment now either.

Small addition: My argument was about the question of whether rent in the supposed retirement of a current homebuyer/builder will be comparable, higher, or lower than the payment for the theoretically acquired property today. I wrote that if rents continue to rise as they have so far, comfortably, if not even higher. Then it was argued that rents will not rise that much due to demographics. Then my arguments followed, which actually culminate in one argument: The number of households will at least stagnate (the Federal Statistical Office even assumes an increase in the number of households until 2040). If you extrapolate the disproportionately growing number of single- and two-person households, there will be no rapid decrease in the number of households in the next 30-50 years, which from my point of view would be necessary to cause stagnation or even a decrease in rents. After that, without major changes in the factors of population development (which, however, will probably also happen since the pension system would otherwise not be financeable), there will clearly be a rapid bend. In any case, from my point of view it is still relatively clear for today’s homebuyers/builders that rent for an adequate property during their retirement will certainly be just as high or even higher than the annuity payment, so a loan term extending into retirement is of course completely legitimate. The barrier of having to pay off a mortgage by retirement is at best a conservative custom, but for some also a paralyzing illusion. Of course, one should start setting aside money regularly for maintenance or carry out the necessary work beforehand; otherwise, after a while, it will be a game of roulette when something needs to be done...

On the question of financing a 400k property:

I don’t know the region, so I also don’t know what you “have to” invest in there. I think it’s always a question of what you can live with. You can definitely live in an 80s property as it is. Many people do that. Usually you only have to invest because you have standards. Or something is really broken. If nothing is seriously broken, you can also live in an old house for now. You just have higher costs for heating and compromises on comfort. If your region has such properties, that would be something to consider. Especially if you expect to have salary increases in the future. Most people don’t earn the same all their life as they did right after finishing training. Then you could still take out a renovation loan with a higher income and modernize the house.

Now, about the numbers with your hypothetical 400k house:
Assuming your equity is enough for the additional purchase costs (but I think that might be tight with 400k), and you would get 100% financing for the property. Let’s calculate again with the hypothetical 1.8% and a monthly payment of 1500€:
With a 400k loan amount, after 15 years of fixed interest period, there would be a remaining debt of about 214k.
Hey, that doesn’t sound so bad?
Why does it not sound bad? Because after half the time until your retirement, about half of the debt is paid off. So it’s doable.
But be careful: my conditions are only assumptions—I have no idea if you would get them.
But even with other conditions, with a margin of 100-200€, something should definitely be possible.

With such a project, you still have to expect about 2000€ monthly burden for the property. Because if I were buying an older house, I would strictly set aside several hundred euros per month for modernization and maintenance. With such properties, you have to expect that something will break in the foreseeable future.