Equity and financing - what is the best mix?

Assuming you had enough equity to finance your construction project and still had a small cushion left. Would you still take out a construction loan due to the favorable interest rate environment or rather not?

The question can only be answered if you know how high the return on your equity currently is.

Up to 60% of the loan-to-value ratio, I would take out a fixed loan under 1% for 5 or 10 years. Depending on the current interest rate of your investments, possibly also a bit more at a higher loan interest rate, if the investment interest rate is higher.

Thank you for the answers. The one from Rumpelkopf roughly corresponds to the recommendation of the financial advisor. Where could you get under 1%? Currently, it seems to be more like 1.15% effective.

1% fixed for 10 years should be realistic.

Basically, any interest rate increase, I think some will come, will make your available capital work.

The basic idea is completely okay and understandable.

Where one compares apples and oranges. Loan of 50k home financing and investment in what? The stock market is still speculative and daily or fixed-term deposits as investment products are unattractive.