Construction costs are currently skyrocketing

2022-10-22 23:46:59

...and you will see that the cost of financing for the customer is the installment. THAT is decisive. And not the consideration over the term. That actually interests almost no one.

I have to agree with you, although I myself studied finance, controlling, etc. and also have decades of experience as a banker. I do look at the cumulative interest payments, but the decision is made based on the installment and the opportunities (rent, etc.). Whether I as a homeowner will have paid 50,000, 100,000, or more in interest after 10-20 years is secondary. Because everyone else has to pay just as much at that time as I do. There are hardly any savings opportunities on interest, unless you forgo owning your own house.

2022-10-23 08:31:04

I have to agree with you, although I myself studied finance, controlling, etc. and also have decades of banking experience. I do look at the cumulative interest payments, but the decision is made based on the installment and the opportunities (rent, etc.). Whether as a homeowner I will have paid 50,000, 100,000, or more in interest after 10-20 years is secondary. Because everyone else has to pay just as much at that point as I do. There are hardly any saving possibilities on the interest, unless you give up owning your own house.

Yes, that's right. That's why I still say that buying a house to live in yourself is a luxury and not a financially worthwhile investment.

2022-10-23 09:18:02

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

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

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

It may be that the mortgage loan sellers among us only focus on the monthly installment and do not clearly explain this to the “uninformed” customer (extension of the term doesn't sound as bad as about 270k more expense), but facts remain facts. This is simple math. That's why my saying is correct: the house must be “worth twice as much” to you, because you effectively pay almost twice as much.

Your saying is only true—and even then only approximately—with an unreasonably low initial repayment of 1%. Otherwise, your example does not work mathematically.

2022-10-23 09:41:21

Yes...18k are still outstanding. The interest rate is always fixed for six months. If they have raised it that drastically now, I have to assume it will go even higher.

I am sincerely sorry. It is so absurd that educators have to pay for their training and in the end don’t receive a pilot’s salary. Then such an interest rate increase given the shortage of educators... just one big shake of the head. :confused:

2022-10-23 09:47:25

Thanks. I’m just so angry right now because I can’t think of a solution (at least not an adequate one). Just the thought that they might go up again in half a year. Then I’d be better off if I took out a consumer loan at 4.5% now and paid off the damn thing. If I had known, I would have done that back in June (I was expecting around 2 to 2.5%). Since 2020, by the way, the loan no longer has to be repaid.

2022-10-23 10:07:28

.. I don't know much about the topic itself, but wouldn't there be places where you could possibly get a discount on the loan in terms of "comparability" etc.? Also considering that newer training probably doesn't require loans? Maybe it's worth doing a bit of googling.

Construction costs are currently skyrocketing

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