Construction financing - How will it change in the future?

We were told very clearly in the first conversation: "If the house isn't paid off by retirement, we'll close the file again today." That was obvious to me and I was surprised when I later learned how casually other banks apparently handle this.

I really see this in a conflicted way. I also clearly believe that the thing must be fully paid off by retirement. Then the house is 30+ years old and all the repairs and renovations begin. Or one is no longer able to maintain everything, then "staff" must come. For that you need money, or the house becomes neglected and decays. From the bank's perspective, I would strongly tie the retirement issue to the property's location and perhaps also to the customer. Clearly, this is not an objective decision, but certainly within the unofficial decision-making scope of the advisor.

I was just about to write that a bank can certainly handle it in such a binary way, but in my opinion, that is quite narrow-minded. I would rather make it dependent on the secured asset (there might be several) and other creditworthiness criteria. But ultimately, it remains a very personal decision, which of course also depends on the financing bank, which has to go along with it. I just wanted to point out that it should be a conscious decision and not adopted as a dogma without questioning it.

Interesting, my bank advisor said that she has no problem if there is still a "small remaining balance" open at retirement. I think you have to "time" it so that the installment is low. One component runs longer than until retirement, but I do not intend to actually let it happen that way. I will take care of settling it before the deadline along the way.

I have now made a plan on how I want to operate with my various components, but I have realized that thinking beyond a horizon of 6...8 years makes no sense. The development is too uncertain... a child starts studying, will it be in the hometown or elsewhere? Those are completely different costs... When does the car actually need to be replaced? How will the salary develop, how will the cost of living evolve? I am paid according to TV-L, so you roughly know what to expect... there are no huge jumps, but hopefully the inflation adjustment will apply. So I have set "short-term goals," and when the outlook on the future becomes clearer, I will define the further path.

And working until retirement: I would be glad if, after the economic independence of the children, I could gradually reduce the hours, but see above... we will have to see then. I can hardly imagine going from full-time to nothing overnight.

Quite clearly, I also think that the thing has to be fully paid off by retirement.

Why? The tenant also pays the full rent until moving out, which is higher than your installment. What are costs of €100k or €200k residual debt with 2% amortization? Compared to the tenant, you are always better off. I don’t want to be just financially secure in old age. I want that now as well, and with that I forego an excessively high amortization (I currently only have 16 years left until retirement at 63 – so I will rather finance the next house with a comfortably low amortization).

Why? The tenant also pays the full rent until the tenant moves out, which is higher than your instalment.

Well, personal attitudes towards loans, risk, consumption, and the desire to pass on wealth to children.

But take a look at the wishes and requests of people here:
Some say they cannot sleep at the thought of having any loan at all, others want the interest rate fixed for 30 years up to minimal repayment, but with stock savings plans instead.

Personally, I’d rather save a few euros too many now and have money in old age than push my debts into the future and possibly end up in old-age poverty.

The thing is, I’m still at the beginning. Maybe in 15 years half will be paid off and the interest rates as ridiculously cheap as they are now. Then I will see it all very calmly.

the desire to inherit wealth to children.

This point should be the last on the list. Restrict your life for the children so that they have it good when I kick the bucket? No, I want to live until I die. If there's something left for the kids, then they should be happy. If not, they’ll have to work for themselves. But you can see how different the ideas are. Because Germans are such scaredy-cats, there is a much lower ownership rate. For example, southern Europeans are far ahead of us in that regard. Anyone who wants to have some fun seeing how rich, for example, the poor Italians are through their real estate can just google it.