We ourselves could probably live more modestly. But from 4 rooms in an acceptable area, it inevitably gets expensive, whether rent or purchase.
Just as an idea:
Currently your rent is a certain amount.
As soon as you expand there, the rent increases. Likewise, the rent will anyway increase over the next 20 years.
With the property, however, the instalment is somewhat fixed (of course, there is some interest rate risk after 10 years, but this should be manageable).
There are several things to weigh here. From my point of view, there is no “financially right or wrong” (for that, you would need a crystal ball), but rather four completely different topics:
1. Financial freedom (this is higher with rent than with a property).
2. Local freedom (this is significantly higher with rent than with a property).
3. How do I want to live? (Here, a own house and garden might possibly score points.)
4. What do I want to save for?
Now I think I’ve already heard (I believe) that local freedom is not important to you. So there are only the three questions left: financial freedom, how do I want to live, what do I want to save for?
Thanks for the input. Yes, I often think so too. In both scenarios you spend a lot of money. That would be a shame or almost dangerous if you (to save money) then are unhappy and still have a certain amount "on your back".
One posting once helped me where it basically said: You don’t actually spend the majority. The home is also capital.
Of course, incidental purchase costs and interest are spent. The rest flows into a capital investment.
Thank you very much. That gives courage. Somehow, the numbers also make rational sense to me that we can afford it. On the other hand, I then think we cannot spend 3800-4000 for a loan? "Who does that? That’s two net salaries," and you still haven’t factored in incidental costs. Somehow that sounds surreal.
About 1.5 years ago I was a bit torn apart here because I also have relatively good starting conditions (though by no means as good) and was still very hesitant.
So from one financially rather reserved person to another:
In the end, it depends on what is left over.
You have an extremely high monthly income. You can afford it.
You could also afford other great things.
The standard here should not be the general public but your desires.
We will have a monthly instalment of about €2200. Given my family background, that is also almost 2 monthly salaries. Feels completely strange to me as well. I admit that immediately. But there is still enough left over. Less than with you, but also more than enough to live well.
So, we do spend money but many hobbies do not cost that much. We also spend little money on clothes. Fortunately, my wife does not buy brand clothing. But I probably have to go at the expenditure calculation again. I calculated a bit more pessimistically this morning. For example, there is a missing item for "improvements and projects" that should be considered if you now have a house + garden.
Funny little idea: Most people have both salary increases and rent increases.
Guess what you would no longer have in the future?
(My colleagues a few years ago financed right to the edge and were in an extremely tight situation. Now, however, it has noticeably relaxed for them due to salary increases in recent years.)
Again, you hit the nail on the head. Here I can add some context. The saving actually does not come from a feeling of fear but the desire to have as much flexibility and freedom as possible. It mentally helped me a lot at work to know that I have money in reserve in case I want to reduce hours or even give up the job to do something less "lucrative". Then there is the thought that I still nurture the dream to significantly reduce work or retire around 50 or 60 and sail around the world (I am a sailor, but fortunately currently have no boat... and am more than fine with that). I at least don’t want to completely block that dream. The more I invest, the bigger the financial cushion becomes and the higher the probability to be able to live that dream. By the way, that all sounds very decadent but I come from normal circumstances and my sailing trip would not be a "luxury yacht trip around the world" but of course such a plan still costs a lot.
I can totally understand that.
It is almost the same for me – only that I would like to make big trips three times a year or so. With a house I will have to reduce that at first to once a year. And live with more financial dependency.