How quickly should one pay off a house?

  • Erstellt am 2024-04-20 21:24:56

Teryamy

2024-04-23 16:34:58
  • #1


These are all just approximate values. We save whatever is left at the end. We don't have a fixed saving rate. It settles at about 2,500 euros per month. Normal vacations up to 3,000/4,000 euros are, I would say, covered by that. A car costing 15,000 to 20,000 euros would already be a significant cut in the saving rate for several months. And if we were now to spend 8,000 euros instead of 4,000 euros on a vacation, which I do not plan, that would also be more than planned.

You don't have to take every word literally. And, we also do not make special repayments. We invest everything 100% in ETFs (what's left) and then just plan to sell all ETFs at the end of the term and "make a special repayment" in calculation only (i.e. it can go well and we make our 7% p.a. or it goes into the negative – in our contract no special repayment is agreed).
 

Zaba123

2024-04-23 16:42:29
  • #2
Then get in touch in 7 years. For us, if everything goes well, it will also be that time then.
 

Musketier

2024-04-23 18:11:43
  • #3
I am also realistic and know that ETFs and stocks can certainly outperform the loan interest rate. On the other hand, it is also nice to look at the loan statement every year and see how the outstanding debt constantly decreases through repayments and special repayments. This can be quite relieving when you know that you can easily pay off the loan yourself in case of emergency.
In addition to the annual special repayment, we were in the comfortable position of still being able to build up an ETF portfolio.
Now we have been living in the house for 9.5 years and could easily repay the outstanding debt.

We do not live particularly frugally (with 2 cars... several vacations per year), yet we regularly question our expenses. We did the same during the house construction and thus were able to build relatively cheaply. (The land and construction prices, which are cheap from today's perspective, naturally worked in our favor.) For us, it was important that we did not have to restrict our standard of living and that we could maintain the house with one salary and some financial restraint in an emergency.
The house itself offers significantly more comfort than one would have in a rental apartment. Whether it then has gold faucets/KNX or anything else inside... is all nice to have, but was not really decisive for us.

But everyone has to decide that for themselves... and so you get quite different answers here.
Some invest a lot but hardly repay, hoping to sell again later at a good price and spend the rest... some hardly repay but invest in ETFs instead, and the next wants to get the loan paid off as quickly as possible. All understandable and yet so different.
 

Teryamy

2024-04-23 20:03:26
  • #4


With 400-800k, it is narrowed down to 11 cities. I want to have a factual discussion here without revealing too much about my personal place of residence (and if I now name a few more details and the exact city, it would probably be quite precisely narrowed down to specific locations, after all, in these 11 cities (i.e. the 11 cities that follow the 4 million-plus cities in Germany [Berlin, Hamburg, Munich, Cologne]) new-build houses don’t grow on trees).

In my opinion, it does not matter for my question, we bought the plot in 2015 (in a process where demand far, far exceeded supply, meaning that even then we paid less than the 2015 market price), built in 2017. Very large (180 sqm + 60 sqm expansion potential), solid and calculated KFW55, lots of large windows, electric venetian blinds, raised ceilings, many extras in the sanitary and electrical areas, underfloor heating 32 degrees, controlled residential ventilation, etc… for 550k including land and all ancillary costs really dirt cheap back then. That public transport here comes every 10 minutes and gets to the city center in 15 to a maximum of 20 minutes is just to emphasize again that the increase in value is realistic in my opinion.

So, mathematically, at just mid-30s, we are probably actually wealthy when you put 900k value, 310k residual debt, 20k depot in relation. In reality, I feel more like on the hamster wheel of debt repayment. We drive two very old cars and only today our children managed to spill a bottle of apple spritzer in the car, luckily only on the footwell, not on the seats. Still, such experiences actually reinforce me not to look for a new car. And yes, probably the car is also the trigger why I am thinking about whether we should now save fixed for 7 years, then pay off everything and then be debt-free or now e.g. get a used car (estate, 6 years old, 70k km, Golf Variant class, automatic, petrol for short distances), which also easily costs 20k, and then I’m already looking forward to when the kids spill apple spritzer there for the first time or climb from the front seats to the back and back again.

The item vacation is out of the question for us. We fly twice a year on vacation. City trips with children are of course no option, we also don’t like skiing/snowboarding at all, so it’s two beach vacations on the Mediterranean (summer, October). We don’t need to fly two weeks to Southeast Asia with a child who can barely walk a few hundred meters to daycare. With a few bridge days and with the obligatory Christmas holidays (family visits...), 30 vacation days are already spent. Otherwise, we naturally try to do a lot of activities like the zoo or other things the city offers for kids. Things like bike tours, playgrounds, or a trip to the city park, of course, cost nothing.

Somehow, at least I read this more often now from , we spend too little money, meaning somehow spending money is equated with living life. Therefore, I try here with concrete examples to show where we save money (branded products, expensive and nearly new cars, taxi instead of bus) and where not (vacations, outings, certainly also a much higher living standard than average). Whether we should perhaps spend a little more money on item X or product Y...
 

Teryamy

2024-04-23 20:10:33
  • #5
And because I got a bit off topic: Somehow I already feel somewhat stuck in the hamster wheel of debt repayment. But I don't know if it gets better once the debts are paid off. Then you're in the hamster wheel of retirement planning. Actually, we're in a good position and could afford more. I just don't really know what the best way is. Whether more consumption really makes us happier? (that's why I also presented a bit more concretely what we're saving on and what, in my opinion, we're not) ... Whether being debt-free makes us happier? And of course, I am aware that due to our age, we were lucky to buy or build the land and house when prices and interest rates were still much lower. Still, one wants to continue making the best possible decisions going forward...
 

moHouse

2024-04-23 20:23:00
  • #6


And by now you must have read here on the last pages that there is no universal right and wrong... even if you had a crystal ball, there would still be various options.

And you yourself don't even know what you actually want. The good feeling of being debt-free vs. the oppressive feeling of lack of freedom (hamster wheel) on the way there.

No one can take that away from you. Talk to your wife about it.
 

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