House purchase: Rushed or feasible? Please assess!

That's quite a statement. Since my gut feeling anyway advises against this rushed decision (even though my eye is enchanted by the house), I would also tend to save for a few more years first. Then we'll just have to rely on our luck and hope that 1.) the land prices don't explode and 2.) the interest rates don't rise or only rise slightly.

We will listen to today's telephone consultation and tomorrow's on-site consultation again and then probably have to decide.

And then I'll make an appointment with my family doctor about the stomach ulcers...

Hello everyone.

A different opinion on the topic of fixing for 20 years. Why on earth fix for 20 years and accept 4%??!!
We also faced such an option. Then we went to the house bank and were offered 2.61% for 10 years. If I now put the 1.4% into repayment, you are at 2.4% repayment. But the whole thing is then "only" fixed for 10 years. But where is the problem? After 10 years, your remaining debt is almost the same as with the 20-year variant after 20 years. And when you renegotiate is completely irrelevant, it depends on the still outstanding amount. Because no one knows what will happen in 10 or 20 years anyway. Therefore, I am rather against this unrestricted pursuit of 20-year fixed rates. You always have to consider the difference compared to 10 or 15 years.

Do I understand this correctly now? Prefer a shorter fixed interest rate period of say 15 years, with lower repayment, and you end up with the same remaining debt as after the 20-year variant? Why would anyone aim for longer fixed interest then at all? Because I would dare to doubt that interest rates will be lower in 20 years when renegotiations are due. (Somehow I'm confused now.)

For us, it's simply important that we can handle the monthly payments now and in the future.

It always depends on how big the interest difference between 10 and 20 years is. For us, it was 1.4%, and that can then be better used for repayment.

That's right... and in your case, I wouldn't have taken the 2.6% for 10 years but would have gotten up and gone to the next bank...

for comparison, I recently received a new financing offer, where 60% of the loan amount was fixed for 30 years at 3.4% effective...

After 10 years, you have almost the same remaining debt as with the 20-year option after 20 years. And when you renegotiate is totally irrelevant, it depends on the remaining amount. Because nobody knows what will happen in 10 or 20 years anyway.

The thing with the "same" remaining debt really only happens with very low repayment and at the same time a very high interest difference...

Nobody knows what will happen in 10 years... exactly... so either you play it safe and secure yourself for 20-30 years, or you risk it and hope that interest rates won't have risen too much in 10 years... If, unfortunately, they are back at 6-7% then you'll just have to pay a few hundred more, and if the financing was already relatively tight before (probably the case with planned 1% repayment!), then that's it.. if interest rates haven't risen or risen only slightly, then of course I can make a profit of several thousand euros...

now you just have to weigh how big you think the chance is that interest rates will be at a similarly low level in 10 years and from when you would be out of the game if interest rates rise too much...

Hello!

There is no patent recipe for financing. Everyone should finance in the way they feel most comfortable.

Personally, I would sleep much worse if I knew that my monthly burden would be more than €400 higher in 10 years if the interest rate increases by 4% and I then have to conclude the follow-up financing. It is about an 80% financing (monthly €663 + special repayment of €1800 annually), which after 10 years still has a residual debt of €124k. Theoretically, the loan would be repaid in 29 years (under the same conditions). However, if I can only repay less in 10 years, this will of course be extended.

With an interest rate lock of 25 years, I theoretically pay off about 2 years longer with the same monthly installments (i.e. 31 years) and take the lower risk of having to pay less than €150 more monthly after 25 years for the follow-up financing of €42,500 residual debt (with +4% interest).

Of course, with a 25-year interest rate lock, I pay more interest in total, but the security of the constant rate is worth it to me. This is a decision that everyone has to make for themselves when they look at their situation and the possibility of change.

I just want to make clear that a long fixed interest period is not always the right choice. I mean, it’s not about the term but purely about the remaining debt that is still there at the end. And we all agree that it’s best if that is as little as possible. But there are situations where after 20 years the remaining debt is exactly the same as after 10 years if you put the otherwise additional interest expenses into repayment. And I think even you, Nosey, would agree that 15 years would have been enough if you had gotten such a good interest rate from Binder Bank for 15 years that you would have ended up with your €45,000 remaining debt. Maybe the longer term gives a better feeling but it doesn’t bring anything. Of course, this only applies if the surcharge is hefty. For us, it was 1.4% and that is a lot of money.