Construction costs are currently skyrocketing

Basically, you are right, but the idea that the house must be worth twice as much at 4% is wrong.

not quite - with a 5% annuity (4% interest, 1% repayment) for a 300k loan, you have a total expense until the end of exactly 604,545.04 euros.

Let's take 5% annuity again (this time 1% interest, 4% repayment), at the end you have only paid 334,854.83 euros.
The rate in example 1: 1250 euros. In example 2? Of course exactly 1250 euros.

A nice side effect in 2: you are done in a considerate 22 years, in example 1 after 40! years.

It may be that mortgage salespeople among us only focus on the monthly rate and do not explain this properly to the "uninformed" customer (extension of the term sounds not as bad as about 270k more expense), but facts remain facts. This is simple math. That’s why my saying is true: the house must be "worth twice as much" to you because you actually pay almost twice as much.

So basically every tenant is a stupid person because they pay out money without getting anything in return (the buyer eventually owns the property, unlike the tenant)? And maybe even more than the one who buys. The tenant who wants to be a "co-tenant" for ideological reasons and makes a stupid decision :rolleyes:

I never claimed that a tenant is stupid. YOU did! Just wrote that. Apart from that, a tenant is actually quite smart if they invest the saved costs (i.e., the money they don’t need because they have no financing costs and possibly require less living space, etc.) into other more profitable investments.

If you really want to find the “grain” in my statements – you’ll have to make a bit more effort, right ;)

not quite - with 5% annuity (4% interest, 1% repayment) you have a total cost of exactly
604,545.04 euros for a 300k loan until the end.

If we take 5% annuity again (this time 1% interest, 4% repayment) you only pay 334,854.83 euros at the end.
The installment in example 1: 1250 euros. in example 2? Of course, exactly 1250 euros.

A nice side effect with 2: you finish leniently in 22 years, in example 1 after 40! years.

But you’re basically comparing apples and oranges because of the different terms. People actually compare those, too. And if I set the same term, e.g. 25 years, the installment increases by about 40% when interest goes up from 1% to 4%. That is then also coincidentally exactly the amount by which the loan becomes more expensive.

I did not compare apples to pears verglichen. I merely took the same annuity as an assumption. Of course, you can increase the installment now - but the one who pays a lower installment, ceteris paribus, could naturally also use it for a higher repayment.

that the price of the financing for the customer is the installment. THAT is decisive. And not the consideration over the term.

For our first house, 260 TDM, financing with 8%,
it was really the installment (compared to the rent) that was crucial,
we didn’t even want to know what we would pay in 32 years.
260 TDM was already an unimaginably large amount, and then in Westmark :eek:

My grandmother lived in the family home for a good 37 years after the death of my grandfather. Sure, not much was done to it anymore, but a comparable rental apartment would not have been affordable. After the sale, at least 5 years of nursing home care could have been financed, but unfortunately, it ended up being only about 8 months...

That with a rental apartment would have failed miserably, because:
You don’t have to maintain the house... the rental apartment, however, you do...