Finance and buy or continue renting in the Stuttgart area?

Is there a current rule of thumb to calculate how much financing you can afford? At that time, with 1% interest, it was about 100 times the monthly net income. We are currently keeping an eye out for houses or larger apartments ...

Didn't you buy anything back then? Bitter :/ Where in Stuttgart do you live?

Well, you should be able to answer that question with your jobs, right? Currently about 4% interest and at least 2% repayment = 6%. What monthly payment would you like? 1500 euros like back then? Still 100,000 euros equity? Then 400,000 euros => (((1500 * 12) / 0.06) + 100,000 equity) 2000 euros? Then 500,000 euros => (((2000 * 12) / 0.06) + 100,000 equity) 2500 euros? Then 600,000 euros => (((2500 * 12) / 0.06) + 100,000 equity) and so on. If equity has changed or you want to repay more, adjust accordingly (just keep in mind that with 2% repayment you also pay massive interest over 27 years). And then it’s just about which rate you feel comfortable with and what living is “worth” to you. With 200k gross per year you can already do a few things – if you want to.

I think I phrased my question wrong. In the end, from my point of view, it’s a trade-off whether buying makes sense compared to renting. Therefore, I try to relate the interest burden of a loan to a cold rent. But rationally, one probably shouldn’t approach the decision like that, and there are plenty of factors in this very simplified view that also have dependencies (e.g., rising interest rates and rising rents). I already wrote this in the other thread. When I looked two years ago, there were absolutely no plots of land to buy. Meanwhile, at least there are offers, and I don’t know how it will develop if interest rates go down again. Maybe I should just update the numbers from the original post since they have changed. By the way, I bought back then… just a small apartment (75 sqm) 10 km from Stuttgart center.

There are calculators for that. But since we have had massive interest rate increases in the last 2 years, with only a slight decline in purchase prices, the calculation will currently favor renting in most scenarios. Purely from an economic perspective. I am still a fan of building/buying because for me there are more factors involved than just pure economic efficiency.

Without current figures, no one can tell you what is better anyway.

And seeing the interest as cold rent. That can be done. But such financings are not designed for the property to belong to you after 30 years. The Swedes do it that way, but with them it is also common that unpaid-off properties are inherited.

However, the cold rent always includes a sufficient(!!) reserve for maintenance and profit for the landlord. Don't forget.

And seeing the interest as cold rent. You can do that. But such financings are not designed for the property to belong to you after 30 years. The Swedes do it that way, but for them it is also common that unpaid properties are inherited.

Repayment was not discussed. The interest can already be below a common rent today, and the repayment so high that you are done in 20 years.

There are calculators for that. But since we have had massive interest rate increases in the last 2 years, with only a slight decrease in purchase prices, the calculation will currently be in favor of renting in most constellations. Purely economically considered. I am still a fan of building/buying, as more factors play a role for me than just pure economics.

Well, for years we had a splitting of purchase prices, the rents remained comparatively inexpensive (the gap between old contract/new contract was already there). Now everything is different – purchase prices are more likely to fall, but only much smaller parts of the population can afford ownership – or are not willing to make the now necessary effort (subsidies, equity & sacrifice). Rental properties remain rare, demand grows, and prices rise rapidly. Thus, rents quickly lie well above today’s already very high interest payments – but those are fixed for 20 years.

With a term of 20 years, your annuity will be significantly higher than the local standard net cold rents. With a financing volume of 400k and 4% interest, that amounts to a good 2400€ per month, of which about 1300€ is interest. Theoretically no problem, after all the place belongs to you at the end. Practically, however, the capital is tied up and rent-free does not mean cost-free, so I would strongly advise against making calculations where the repayment is seen entirely as an investment. As long as you are not firmly planning a sale in old age, there should always be room for a dedicated retirement provision alongside the property.