End of fixed interest period 2027 - increase repayment or other options?

You need to consider two things for yourself: How do you assess the risk of being able to service the follow-up financing even if interest rates continue to rise? If you see a significant risk there, your investment horizon is 5 years.

If you definitely want to reduce your risk in 5 years, you take a fixed-term deposit annually or every 2 years, if you find a bank that meets your security requirements, and put the special repayment there.

If you say you want to try your luck on the stock market and do not need the money guaranteed after 5 years, then try ETFs.

The considerations about wage increases, inflation, etc. are only of interest as to whether you see a risk of being able to manage the follow-up financing in 5 years or not, because these factors affect both ways equally.

PS: Not to be underestimated in these turbulent times: With special repayments, the money is definitely "gone." You no longer have access to it. With fixed-term deposits and ETFs, you could in principle react to changed circumstances within the 5 years.

PS: Not to be underestimated in these wild times: With special repayments, the money is definitely "gone". You no longer have access to it. With fixed deposits and ETFs, you could in principle react to changed circumstances within the 5 years.

I even see it as an advantage - basically! The money is then not wasted on consumption. There are so many loans with low repayments where the borrowers said, "We will ALWAYS make up for that with the special repayment." And what happened? Nothing. The OP hasn't done anything so far either - neither saved nor repaid additionally.

I even see it as an advantage - basically! The money is then not wasted on consumption. There are so many loans with low repayments where the borrowers said, "We will ALWAYS make up for that with the special repayment." And what happened? Nothing. The OP hasn’t done anything so far either - neither saved nor made additional repayments.

To be honest: at my wife’s company, there will be short-time work from January, no one knows for how long. "Staff reduction" is also already on the table. In such a situation, I am honestly glad if I can, bluntly put, cover the financing with reserves and savings in case of doubt and thus bridge a year of unemployment. If I had put the money into special repayments, the outstanding debt would be lower. But if I then have problems paying the installments due to external circumstances, I haven’t been able to do much.

I even see it as an advantage - in principle! The money is then not wasted on consumption. (...)

Oh dear. Are we talking about junkies who put every cent into their next fix? You can throw everything into the special repayment so that you don’t even get the idea of buying a PS5 or Lego with it... other people are quite capable of managing their money and many of them will be glad to have reserves next year.

Because the crisis is not over yet, it will really start next year.

PS: Why should anyone have made special repayments so far? Interest rates were as low as never before until about half a year ago. I’m not going to repay an additional 10 years if my interest rate is 2.5% and the current rates are at 1%, right?

If I put the money into special repayments, the remaining debt is indeed lower. But if I then have problems servicing the installment due to external circumstances, I have limited options.

The line of thought is not quite correct. Special repayments and possible liquidity problems initially have nothing to do with each other. From experience (I have been working in real estate financing for 25 years), 90% of customers only have the choice between "special repayment" and "I would have to / I still want to buy this or that." If you go either of these two ways, in case of unemployment, you have in one variant just built up a bit more assets than in the other. But you still cannot service the installment. However, it is much easier to talk to the bank!

Then there are the remaining 10%. They not only make special repayments and/or consume but also build reserves for bad times. They can face liquidity problems more relaxed.

Unfortunately, in recent years, anyone who wanted to could buy a property somehow. The money was cheap and every job was "secure" – why should "something happen to me"? Nobody expected (and could have) the situation as it is today. But those who have calculated tightly in recent years are now facing problems. We have seen enough tight calculations here in the forum.

Oh dear. Are we talking about junkies here who put every cent into their next fix? You can throw everything into special repayments to make sure you don’t get the idea of buying a PS5 or Lego with it... other people are perfectly capable of managing their money, and many of them will be glad to have reserves next year.

No, we are talking about perfectly normal people. And the average person prefers to consume rather than save. As I said, my experience and my job at a bank that does nothing else but finance real estate shows this to me. Many people may think they manage their money well. But they have never thought that every month suddenly becomes 500€ more expensive because all prices have risen.

PS: Why should anyone have made special repayments until now? Interest rates were as low as never before until half a year ago. I certainly don’t pay off for an extra 10 years when my interest rate is 2.5% and current interest rates are at 1%.

I am not saying that you have to make special repayments. I am saying that the vast majority simply does not do it – even though they intended to do so very much. I am saying that you should not put all your money into consumption. And a special repayment is forced savings – the money is simply gone and cannot be used elsewhere. That has a lot to do with psychology. If I don’t have to, I won’t. Therefore, I always preach – if it fits financially – better to pay off more directly (except for very young people). You get used to it incredibly quickly, and it doesn’t hurt.

And regarding the original poster, my assessment fits quite well. No higher repayments for years. Only short fixed interest period. Special repayment option not used. No reserves to significantly reduce the remaining debt at the end of the fixed interest period. That is the reality for many customers.

Honestly: at my wife's company there will be short-time work starting in January, no one knows for how long. "Staff reduction" is already being discussed. In such a situation, I am frankly glad if I can, bluntly put, use reserves and savings to cover financing in case of doubt and thus bridge a year of unemployment. If I put the money into special repayments, the remaining debt is indeed lower. But if I then have problems servicing the installment due to external circumstances, I have limited options.

Skilled labor shortage, look for a new job or side job, reduce vacation, reduce consumption