Financing - your opinion? Realistic?

Thank you very much for the answers ☺️ The question of who will stay at home eventually does not arise yet - currently, it is crucial for us to decide whether to do or leave it.

Personally, the €90,000 remaining debt would be an eyesore for me. For me, the most important thing was to have as little risk or remaining debt as possible. With the offer from my bank, I would still have had remaining debt after 20 years and then had to pay it off for another 3 years, albeit not much, at an unknown interest rate. But I wrote a program with Excel and tinkered a bit with the parameters of the bank's offer until I found the best solution for my case. I then sent this to the bank, and the banker (admittedly a friend of mine) entered everything into his program and said that it could be done that way. Now I have saved not only 5 years of repayment but also an additional €25k in interest, and the house is paid off after just over 18 years. I must also admit that we had a six-figure amount of equity and also a few building savings contracts running, which we basically included as a kind of refinancing after the 10-year fixed interest period. It’s very complicated, but that’s exactly why I am proud of the result. What I actually want to say is that it can be worthwhile to scrutinize the bank’s offers again and tinker with them a bit; besides, you have to build sensibly, and then it will work out. I basically see your financing as feasible, but as I said, the remaining debt would bother me. In 25 years, renovations or a new heating system will probably be due again as well, one must not forget that...

That is a good tip, thank you very much. I believe we actually still need to do something about it, even if we would then have roughly 8 more years (bis zur Rente 8x12 a 1000€), it is somehow mentally annoying. You pay and pay and in the end such a big chunk awaits.

Thank you for your honest and detailed answer.

If you can afford it, I would rather see the better rate at €1350. Then you would probably only have a very small remaining debt and that would probably be gone in the case of an early special repayment. But you still have to be clear that you need to be able to put something aside a) for children and b) for renovations. As I said, if you don’t have huge demands, then that should certainly work. You have more monthly income than we do but significantly less equity. The bigger problem for you is that you are 2 years behind us and we got a top interest rate. But we also had to pay for the land. Nevertheless, the whole undertaking will probably cost you more than it costs us...

Well, the matter of the remaining debt is very individual to assess. I don’t find 90k in 20 years worrying at all. Aside from the fact that the value of 90k in 20 years is hardly predictable (maybe there will be more inflation after all), the remaining debt is also offset by assets. If I can get better interest rates and a more comfortable installment today because of it, I find it absolutely legitimate to calculate with a manageable remaining debt. With some people, you get the feeling that they don’t really live in the here and now but only plan their retirement very far in advance. P.S. There are also cases where it never actually starts.

I only said that personally it would bother me. If, after such a long repayment period, you still have an outstanding debt, you have to be aware that you have already paid the bank a lot of interest. After 18 years, we will have paid approximately 30,000 euros in interest and the house is completely paid off. In this case, the builders would have paid 115,000 euros in interest for a house the same size as ours and still have 90,000 euros left to pay with an uncertain interest rate. The bank will be happy, but for me it would be way too expensive and uncertain... even if I consider that I only took out a 220,000 euro loan for the 30,000 euros interest, I see the 320,000 euros with 115,000 euros interest and 90,000 euros outstanding debt as a clear disproportion. In other words, I will have paid about 380,000 euros for my 151 sqm house including bank interest, and Hinterlandbau, for a house of the same size and without having to pay for the land, would already pay 435,000 euros + at least 90,000 euros + x, so probably well over 500,000 euros for a comparable property and without land! So for me, that would be way too expensive, lovely as it might be... or if I have a calculation or logical error, then please enlighten me.