Condominium for 460,000 euros and a 37-year loan term?

In 20 years the place will easily be worth a million. And you’re still sweating over a measly 180 thousand?

Just compound your current cold rent at 2% annually over 20 years. That turns out differently, and you’ll see the 180k more relaxed...

Alternatively: finance over 10 years, by then the apartment will be too small anyway with 2 kids.

Yeah, right

Yeah, right

yes, yes... with 4300 net and 160k equity you can be a bit more relaxed. In the worst case, just a bit more Rossmann and a bit less Chanel.

Just as a note. Guessing the interest rate in 20 years is complete nonsense. Better calculate with 6% – that puts you on the safe side in the long-term average. 10 years ago you were still above 5%, 20-25 years ago over 8-9%.

If both of you earn the 4,300 € and want to have another child, I WOULD not burden myself with such a high financing. If only 2% repayment is possible in the long term (at least that’s how I read your plan), the financing is either done or the income is too low.

Just the opinion of a real estate banker – so please don’t take it badly.

I am grateful for every opinion! If I actually assume 6%, then I don’t really need to continue because from my point of view the financing would no longer be feasible.

I have taken a conservative approach with the repayment. I assume that we can increase the rate at some point (primarily through higher salaries), but probably only to a limited extent: in a maximum of 20 years, child 1+2 may want to study, which will drastically increase monthly expenses again.

In the first 3 years after purchase, I would also repay only 1.5% for two reasons:

- Expected parental leave for child 2
- Condition from DSL-Bank, which states that you can only reduce repayment as much as you initially enter into the loan

Calculate your current cold rent with 2% annually over 20 years. That will make it different, and you’ll see the 180k more relaxed...

Alternatively: finance over 10 years, by then the apartment will be too small with 2 children anyway.

Good point. Even now, renting is not cheaper regarding the monthly burden.

The apartment with 116 sqm and 5 rooms should size-wise accommodate a 4-person family; after 20 years, when the children have moved out, it’s actually too big. Therefore, a sale at that point might make sense and the question about the interest rate after 20 years would be moot.

In the worst case, just a bit more Rossmann and a bit less Chanel.

Good point! However, you can also spend an incredible amount of money at Rossmann..

The crystal ball is broken.... you could take out a [building savings contract], but that also means a monthly burden

For the first 3 years after purchase, I would only repay 1.5% for 2 reasons:

If you plan to do that, then you can forget about the whole topic right away. Regardless of whether the reasoning makes sense (in this case it does) or is pointless. Even if it's only for 3 years. Over 20 years, that is a little more than 1/6 of the fixed interest period that you waste by repaying only 1.5%, and as a result, you pay a ton of interest. Just for comparison: I am financing €418k and repaying over 20 years with an initial 3%. Furthermore, I’m past the expensive daycare age and don’t pay childcare costs for either of my kids anymore. You also have to realize when you can’t afford something. Your problem, but also luck, is that you have €160k equity, which gives you a good starting point. Unfortunately, it is not like that because your income does not match the property. Don’t get me wrong, it’s not about your income, but the property is simply too expensive. EDIT: We had 5.31% interest for a 15-year fixed interest period exactly 10 years ago. So it’s not really unrealistic to end up there again in 20 years, is it? But I could have already bought a plot + house 5 years ago, which I didn’t do because the initial situation (location dependency) was not yet certain. If I had done it, I would be 5 years further now and wouldn’t just be starting to build in 3 weeks. But then without the child construction subsidy. So you see, coulda, woulda, shoulda. No matter how you do it, you do it wrong :-p

If you intend to do that, then you can just forget about the topic. Regardless of whether the reasoning is sensible (in this case it is) or nonsensical.

Even if it is only 3 years. With 20 years, it is a bit more than 1/6 of the fixed interest period, which you waste with 1.5% repayment and thereby pay a lot of interest.

Just for comparison: I am financing €418k and repaying over 20 years with an initial 3%. Furthermore, I am out of the expensive daycare age and no longer pay childcare costs for either.

One must also realize when something is unaffordable. Your problem, but also your luck, is that you have €160k equity, which gives you the illusion of a good starting position. Unfortunately, it is not the case since your income does not match the property.

Don’t get me wrong, it’s not about your income, but that the property is simply too expensive.

Harsh words but true. Moreover, it is human nature that customers get used to the rate and always say: the special repayment will fix it. Statistically speaking, it is hardly used because things like buying a car come up.