Home financing - low initial rates / rapid increase?

Well, I’m also employed at a company bound by the IG Metall collective agreement. But anyone who feels the need to rely financially on IG Metall or even make their future dependent on the union is certainly not exactly a shining example of an engineer. You can safely consider the annual 3% as just an inflation adjustment. In my experience, inflation especially hits those things that are fun. One more thing: If you, as a collectively employed person, hope for big jumps in salary, you may have misunderstood something. You don’t just move out of your pay group that easily, and performance bonuses are more like “seniority bonuses.” At a small company or medium-sized business, you can try for bigger jumps—without a collective agreement.

There is about 2% every 2 years (for example, 3.4% in the last collective bargaining round). And your calculation regarding inflation doesn’t make sense. Inflation has no impact on the monthly installment to be paid. The collective agreement increase, however, does. I have more money in my pocket and can pay the installment “more easily.”

Of course, there is nothing against the property, but against the large castle on it.

You can, for example, simply buy the property and pay it off. Then in a few years, you will have a great starting position.

Then I will probably have to design the house so that after 10 years a nice extension can be added.

Hi!

You should urgently take to heart what Dachschaden said.

Yes, you surely have colleagues who have been at that place for 20 years. They will now all be AT employees and will be playing in the salary league from €110k upwards. If not, they really messed up!

It's the same with my colleagues, (I’m at the big variety store with the S at the beginning).

It used to be that a job there was virtually like civil service and was also seen that way by the banks. And as an engineer, you could hardly avoid becoming an AT employee after 7-10 years with the corresponding salary.

Unfortunately, those golden times are over. Someone has to pay your colleagues’ golden spoons and that is exactly you and no one else. Don’t make the mistake of transferring their previous salary development onto yourself. That won’t work!

Today, you can only get out of your ERA group (you'll be somewhere in group 9-10) with a crowbar. You really have to be good and threaten your boss with resignation!

Get used to being the one who pays the bill for the party of today’s 50-70 year olds. It will be much worse with topics like pension, partial retirement, etc… Don’t get upset about it, better go have a drink or emigrate to Switzerland.

And aside from that:

Why do you already want to tie yourself down with a house? Maybe you should change the job, the plant, the employer? Maybe a few years abroad? I believe automotive companies still offer quite good conditions for a few years abroad.

Best regards,

Andreas

It is about 2% every 2 years (for example, 3.4% in the last collective bargaining). And your calculation with inflation makes no sense. Inflation has no effect on the monthly repayment rate. However, the wage increase does. I have more money in my pocket and can pay the rate "more easily."

Please remember that electricity is getting more expensive, as well as food, fuel, a new car, clothing, dining out, etc. This is the inflation that you are currently ignoring. 2% more salary against a target inflation of also 2% (the current situation is not normal and not permanent) – it does not make it much easier for you to pay the rate. By the way, personal expectations also rise with increasing income, and once again, more money is gone.

Now don’t get so hung up on the inflation compensation / salary increase issue. Basically, he’s not wrong, and the fundamental question concerns every "young" person who wants to build. The bank usually only looks at the current income, but almost everyone who got financing "back then" earns significantly more today. Whether through collective agreements, contractually agreed increases, job changes, further training, etc., etc. This is rarely guaranteed, but actually applies always. Certainly, part of this salary increase goes again for price increases and lifestyle, but the installment is fixed and thus takes up an increasingly smaller percentage of total expenses over the years. He now wants to know how he can optimize his financing with regard to this "problem." So design the installment so that it represents a fixed percentage of income, instead of the fixed absolute amount. I wouldn’t know whether it is generally possible, for example, to calculate with a higher residual debt after the end of the term and then "at first" agree only to a short term of 15 years. Or do you start with a low repayment that is increased later? Or do you only work with special repayments toward the end? Or are there still products, similar to the capital life insurance that used to be offered, which you pay into in parallel (with installments that adjust to the salary) in order to pay off the residual debt at the end of the term? That consideration is not uninteresting after all...