Because many people here keep harping on the inheritance disputes: From my perspective, the purchase price is determined by the notarized contract and the transfer of benefits and burdens. That should be relatively close in time. The repayment then takes place via a loan. Even in the event of a death, the community of heirs should initially be bound to existing contracts (loan agreement). In §2039 ff of the Building Code, no special termination options are mentioned after a quick glance. So if nothing explicit about death is regulated in the loan agreement, it continues normally between the buyer and the community of heirs from my point of view.
Financially, it makes more sense for both if you pay him out slowly.
That depends. The uncle (and possibly his heirs) give up the same return difference between the possible stock gains and the 0.5% loan interest rate, which the buyer would like to claim for himself by not wanting to invest the money from the portfolio. Now, one might of course assume that the uncle would not invest his money so riskily, and then 0.5% is better than any overnight money. That is correct in that case. Apparently, however, the uncle is also set for life and could, despite his advanced age, invest the money significantly more riskily on the stock market for the next generation with an investment period of >10 years rather than as fixed deposit or overnight money.
But even if the uncle would not invest in the stock market now, precisely these two points combined could become interesting in the actual inheritance. The heirs then only have the right to interest on the loan at 0.5%, although they themselves would have the lifetime to invest long-term in the stock market. In contrast, the buyer might make the big hit on the stock market with the cheap money from the loan.