Somehow I am skeptical, but maybe only because I am not familiar with variable loans. Help me quickly understand the structure: The 3-month Euribor is currently at 1.1%. How should the margin of 2.75% be understood? Are these additive percentage points? That would mean a total of 3.8% with a strong upward tendency and right at your limit of 4%.
I feel the same, the skepticism is great. I do not understand the margin of 2.75% as additive percent, but I could be wrong.
You don’t even know which rate. That can be done if you finance a manageable amount or still have a lot of leeway in the rate. But if you want to finance such a high volume and the rate is already quite high, then it’s basically Russian roulette...
Of course I don’t know the rate. That’s why I also wrote that a rate of €2800 would be affordable. Anything above that I have to cover from my equity and I know that doesn’t work well forever.
You are making the mistake here of believing that everything you have seen during the observation period is all that is possible. In this case, we don’t even have to look into the future; a look into the past is enough. For example, regarding floods, the measurement series since the 1950s (often euphemistically described as “since the beginning of records”) says little about extreme events. Most of the last 20 years were also quite interest-rate friendly. Extend the chart by a few more decades and it looks different. Currently, we have a situation that might develop like in the 70s. Back then interest rates were double-digit at their peak. The problem is: if interest rates should rise quickly now (perhaps one has learned from the 70s), then with high debt you have high interest. Take something with a fixed interest rate, at least until the larger part is paid off. If that doesn’t work, adjust the house to the budget or bring in more equity. PS: A book tip for that is basically everything by Nassim Taleb
You are absolutely right, I cannot foresee everything. Unfortunately, the chart does not go beyond 1999. I roughly know the situation in the 70s; in case of the variable loan, it would lead to a financial fiasco for me. :(