Financing single-family house in Saxony

There are also banks where the loan must be fully paid off at 75

and there are banks where age does not matter...

I also finance houses in the Rhineland that are paid off but currently worth 1 million or much more...
the people are already retired and say to themselves: why should I leave a house worth 1.2 million as an inheritance? 1 million is enough, right? So they take out a 200,000 EUR loan with 1% repayment and travel and spend the money... the heirs then receive the house with some debt...

I believe you only need to be definitely able to afford the installment until the end of the repayment period. Apart from that, I also find it very odd to finance until the age of 75 or 80. Especially since then you would have a 40-year-old house and you will certainly have to carry out major maintenance after 20 years, so you would have to finance again right away.

Purely financially, this is quite understandable given the current interest rates and inflation values. However, it would not be a model I would personally want to emulate.

So according to residential loan guidelines, the bank must check if the term runs into retirement age whether one can continue to cover the installment with the pension. If one can.

On the other hand: if you have a paid-off house in retirement, you only pay the ancillary costs.

What about retirees who don’t own property? Don’t they pay any "cold rent"? So it has to be affordable there too....

And of course, the best is if you have paid off the house by retirement + preferably still can carry out major renovations out of your own pocket before retirement.

BUT
we should also be honest... who among you wants to live in a 190 sqm house with 750 sqm of land with 2 people in retirement? Because that has to be cleaned, maintained.

My wife and I left Cologne, don’t live far away, but nearby (a few km from Bonn) with a large plot (children’s paradise) and a bigger house. Our goal, however, is also of course that when the children leave the house, we downsize and move to the city apartment (which you preferably buy beforehand and rent out ;)

Because in retirement you have something low-maintenance, and everything within walking distance ;)
(and paid off, even if the house was not yet paid off...)

Thank you for the clarification! In terms of pensions, we could have afforded a longer term. As a civil servant and an employee in the public sector, the available amount is already foreseeable. But the bank did not want that and I actually think that is right. However, if you want to take out a loan again at an advanced age and have corresponding assets to pledge, that is of course also okay. But I have read that the relatively new law actually prevents that.

For me, it is also not a model to finance the property until retirement age. That will not happen either, because:

The remaining debt after 25 years is around 210,000 euros (fictional, since as I said I calculated good buffers and it must also be taken into account that I can immediately use the KFW 55 and BAFA subsidies again as special repayments).

The remaining debt can then be covered by expiring life insurance policies. Theoretically, I wouldn’t even have to make further special repayments, which of course I plan to do. I don’t see my planned financing as that unsound.

You can either take the KfW or the BAFA funding. Both together are not possible