Future planning: special repayments yes or no?

We have now moved into our condominium - despite Corona, everything went excellently and we feel comfortable here. Since the apartment has only three rooms, a move to a house / larger condominium will of course be necessary at some point (investment then about 600,000-650,000 euros). We are 23 years old today and want to stay here until we are 30-32. Currently, we save about 10,000 euros per person per year. So, until we want to build again, we have 8 years x 2 people x 10,000 euros = 160,000 euros available (without income increases - with those, the savings amounts should rise to 15,000 euros per year / person in at most 3 years). In addition, of course, the repayment of the apartment, about 70,000 euros of the outstanding 350,000 euros. Possibly, a small inheritance from grandpa is also expected (about 50,000 euros). Now we are wondering whether special repayments make sense or if we would prefer to keep the money as "equity" and invest it (e.g. ETFs / real estate funds). We still don't know whether we want to keep the apartment here and rent it out or sell it. What do you think?

The interest rate is by the way 0.93% (combined bank/KfW loan).

Your condominium will later be your equity. How much special repayment are you allowed? I would arrange 2/3 or 1:1, so pay off 2/3 and set aside 1/3 or just 50:50. Something like that. When everything comes to light in 10 years, it doesn't matter anyway. But you always need some money to act.

Hi, I would pay off the condominium as quickly as possible. Afterwards, rent it out, finance the new house from the rental income. Regards Olli

If you want to keep the apartment, then do not amortize but save because you can claim the interest against the rental income. If you intend to sell, then amortize amortize amortize to reduce the prepayment penalty when selling.

Hi,
I would pay off the condo as quickly as possible.
Then rent it out, and finance the new house with the rental income.

Exactly the other way around if you want to rent it out. You also don’t want to give half of the income to the state within the scope of V+V. So it’s better to let the rental income pay off the condo and consider the interest for tax purposes. Then pay for the house from your own income – the loan will not be so high because you have saved equity (instead of paying off the condo).