Full financing or saving?

ich und meine Partnerin (Mitte/Ende 20) denken derzeit

What about planning for children? I just realized again that it costs a lot of money. You must also not forget that with children there are often income restrictions for some time.

You should think about these things, also about the advice from 77.willo (because of the surplus)

Thanks in advance for the answers.

We inevitably had exactly such considerations ourselves.

On the one hand, what would happen if, for whatever reason, the property had to be sold and then the proceeds would not cover the liabilities and you still had debt on your hands. That would of course be bad.

On the other hand, the timing of the financing and the further approach. I have made the following calculation.

Assuming we would finance like this in 2016:

Total (110% financing): €440,000 (including incidental purchase costs)
Interest rate: 2.3% (15 years) (realistic?)
Repayment: 2%
Resulting in an installment of about €1,580
Paid off with unchanged interest: 2050
Interest payments would be around: €126,000

Assuming we would save for 6 years, have €80,000 - then it would be 2022:

Total (90% financing): €360,000 (including incidental purchase costs)
Interest rate: 1.5% (15 years) (assumed similar level as 2016)
Repayment: 3%
Resulting in an installment of about €1,350
Paid off with unchanged interest: 2049
Interest payments would be around: €61,000

In these 6 years, rental payments amounted to about €58,000.

In this scenario, the interest savings if we finance in 2022 would be €65,000 and the property would even be paid off slightly earlier.

€65,000 minus the rental payments of €58,000 (which just go down the drain) would at least result in a saving of €7,000. (including earlier payoff and lower monthly burden).

I don’t know how realistic this scenario is now. But under this premise, we should actually go for the 2022 option.

However, if in 2022 the interest rate is higher, say: 1.80% (or even higher), that would result in interest payments of almost €73,000. The saving would then be €53,000. Minus €58,000 rental payments. And then we would pay €5,000 more than if we had done it in 2016.

Regarding accounts: My girlfriend has been with Volksbank for over 10 years. I have been with the DKB for almost 5 years. Maybe we should really just have a talk at the Volksbank.

I had completely overlooked the thing with the kids... so in the next 3-4 years that is already “planned” as far as one can plan. My girlfriend would then go on parental leave (public service).

We really need to think about that again.


That’s a good point about the remaining debts!

The consideration of rent is also typical for the forum: you get an apartment to live in for that. In most cases, it is financially much more sensible than acquiring home ownership. Or what do you get for the immense additional costs of a loan that you do not get for rent?

Well, the forum is right, paying rent for 10 years you had an apartment to live in but nothing more. If you buy something in the same time, you probably have more costs but after 10 years you have something tangible.

And do not forget the markup for the next 6 years on the purchase price.

And don't forget the surcharge for the next 6 years on the purchase price.

True! Thanks.

Save the additional purchase costs. At a net income of 5.7k, that should take at most 1.5 years. Then start with 100% financing and proper repayment to quickly get into a non-critical zone. Suitable properties don’t grow on trees anyway, that also takes time. And don’t let yourself be pressured. Neither the current interest rate level nor the (wrong) idea of throwing money away on rent are good advisors.