Change repayment rate - bank now requires new documents

624 € is the current installment. Of that, 117 € currently goes to interest. You have to explain that. I calculate exclusively with current fixed deposit interest rates. I would never go into ETFs with 13 years - that is pure gambling. ETFs are my retirement provision. How is that risky? The only thing is: you have to invest the money at a fixed interest rate. If you consume it, of course you have lost. With a good fixed interest rate, the debt at the end is almost 10,000 € less than if you keep the rate high or make special repayments. The plan would be to fully repay the loan after 13 years. But suppose something happens until then and it doesn't work out: How are you worse off? Provided the money is also saved at a fixed interest rate? Do the calculation for that. I don't know your loan details, but depending on the situation this (purely mental) security costs five-figure sums.

After taxes, it is a difference of about +7k€ over 7 years, although this only holds as long as the overnight money does not decrease, of course. Fixed deposits are not an option because they are too inflexible. Whether the 7k€ are worth it to me and I do not make special repayments I do not know yet. It will become clear in December.

Fixed deposit is not an option because it is too inflexible.

If the money is tied up in a loan, it is even more inflexible.

I still don’t understand. At the end of the fixed interest period (or anytime after 10 years) you should have all your ducks in a row and can then make a lump-sum prepayment or legally correctly "partial repay". - § 489 Baugesetzbuch

And you would even do this with the extra interest you saved.

I know, on paper it’s obviously all advantageous. You can’t deny that. I’m more saying that you just repaid what you repaid. If you invest it elsewhere until the fixed interest period ends—then something unforeseen happens and you urgently need some cash—you just tap into it after all; there’s still plenty of time, you can save it up again, etc... that’s how life sometimes goes. This would be less risky if interest rates were still at the level back then. Since with comparable incomes you’d again have a comparable household budget (or whatever the bankers call it exactly). But if you repaid less than originally planned, you had less in your savings for whatever reasons than forecasted, and then interest rates are at five times the level as when you first signed the contract, that can break your neck at that point. If a smaller number is on the clock, it can still work out and the rate still fits your income. But if there’s a significantly larger outstanding balance and due to increased interest rates a much higher monthly burden, then it might not fit anymore.

I took the trouble to calculate the possible savings, but I'm not quite sure if they are correct. Unfortunately, I am also a layman. Please, could someone take a look to see if this could be right.



The savings seem quite high, at least if you assume a relatively high repayment rate, which greatly reduces the repayment and fully accrues interest and compound interest on all the money.

The capital gains tax still needs to be taken into account. And it is hard to predict whether [Tagesgeld] will really continue to have such high interest rates. Most offers are currently limited to a few months.

There are numerous fixed-term deposit offers, all above 4%, and optionally lasting up to 10 years. However, the best interest rate is between 1 and 5 years. Since the money is supposed to be accessed only in case of extreme emergency, there is no need for a daily accessible instant access account.