Is 100% financing possible at an older age?

I would not have thought that I would ask another question about home financing, but it looks like I "have to" buy my sister’s house soon to rent it out.

[*]How old are you? 55(m) and 54(f)
[*]Do you have children? 20 and 17, education is covered with separate money
[*]What do you do professionally? Employed 37.5 h/week and 20 h/week

Income and asset situation:

[*]What income do you have (net)? 4000 and 1000.--€ x 13.5
[*]2x rent 800.-- + 300.—
[*]How much child benefit is there? 2x 219.--
[*]How much equity do you have? 100000.--
[*]How much equity do you want to invest in the house project? 0.—

[*]Additionally, the following exists but is currently not available, i.e., cannot/will not be liquidated and is still being saved
[*]Company pension: 100000.— paid by employer
[*]Riester pension: 70000.-- + 10000.—
[*]Life insurance: 60000.--
[*]Building savings contract: 10000.—

Expense situation:

Currently occupied house is paid off, value approx. 300000.--

Large apartment is paid off. Value approx. 300000.--

Repayment of smaller apartment until mid-2024 with 550.--/month (current debt 12000.--) Value approx. 100000.--

I don’t think it makes sense to list the expense situation in detail.

Current savings rate is 1600.--/month, all invested in ETFs

Standard of living should be maintained or increased by the amount the children will soon no longer need

Purchase costs:

Single-family house. Built in 2006
Exact amount is not yet negotiated but should be around 550000.--

Expected rent: 1300.--/month

No renovations necessary

Financing:

Planned to finance 100%, but if the interest surcharge is higher than the tax saving, max. 50000.—with equity.

Selling the apartments is not planned.

Fixed interest period: 15 years if possible, otherwise 12 years.

Monthly rate should be moderate at 2500.— and still leave room for other expenses (my house is 150.—years old, if I or the children need money, partial retirement, etc.)

Questions:

Since I am still in the consideration phase, I have not yet asked any bank. Different banks are registered for the existing properties, of which 2 (Sparkasse and Deutsche Bank) are options, but Wüstenrot is no longer.

Does it make sense to also go through brokers or is the starting position too complicated or risky for them?

How would you assess the situation? Feasible? Sensible?

What interest rate can I expect?

Choose a different financing model?

Is it possible to get 30-50000.— above the purchase price?

First question: Why would you take on such an investment at that age?

Does it make sense to go through intermediaries as well, or is the initial situation too complicated or risky for them?

It’s standard - an intermediary can handle that too.

How would you assess the situation? Feasible? Sensible?

Feasible? Yes. Sensible? No.

What interest rate can I expect?

Only secured on the new property? Then it’s around 3%. Additionally secured with the unencumbered property? Then top conditions.

In the end, it will also depend on your pension expectations whether a bank is involved or not.

Is there a possibility to get 30-50,000.— above the purchase price?

With the additional securities, definitely.

@ User 200, the answer is a bit contradictory. On one hand, it’s standard, but on the portals you can already not select without property transfer tax, on the other hand I get top conditions but then it depends on the expected pension.
Regarding the question why I do something like this. Family help, choosing my neighbors myself, enabling my children a simple start in a few years as soft reasons. As hard reasons a tax-free return of over 3% plus after 10 years the tax-free appreciation of 5-10% plus leverage. And that for RK1, where the interest rate for fixed deposits is negative

@ user 200, the answer is a bit contradictory. On the one hand it is 0815, but on the portals you cannot already select without real estate transfer tax,

That is also part of the costs (and must also be paid, just like notary, broker, etc.). But you talked about intermediaries, not internet portals. You have to make some effort and become active ;-)

on the other hand I get top conditions but then it depends on the expected pension.

==> please read carefully

Secured in addition with the unencumbered property? Then top conditions.

Regarding the question why I do something like this. Family help, choosing my neighbors myself, enabling my children a simple start in a few years as soft reasons.

Well then, if a property is the right start.

As hard reasons a tax-free yield of over 3% plus after 10 years the tax-free appreciation of 5-10% plus leverage through borrowed capital. And that for RK1, where the interest for fixed deposits is negative.

How do you achieve this yield? If the interest costs are above the rental income? And if the property is worn out in 10 years or the prices have dropped somewhat again, the kids will be happy about a super start...

Expected rent: 1300.--/month [..] Rate should be moderate at 2500.— [..] As hard reasons, a tax-free return of over 3% plus after 10 years the tax-free appreciation of 5-10%.

With the currently rising interest rates, simultaneous appreciation is not possible. Have you taken into account the 1% annual depreciation due to wear and tear? Can you calculate the 3% and show how you arrive at that?

The plan was to finance 100%, but if the interest surcharge exceeds the tax savings, max. 50000.—with equity. [..] Is it possible to get 30-50000.— above the purchase price?

Do you want to finance the ancillary purchase costs as well? Then you are looking at 110% financing. If you want even "30-50000" beyond that, it will be even higher. It will be even worse than that. You would have to remortgage your debt-free properties.

With the currently rising interest rates, simultaneous appreciation is not possible.

Have you taken into account the depreciation of 1% per year due to wear and tear?
Can you calculate the 3% and show how you arrive at it?

Do you want to finance the incidental purchase costs? Then you are looking at 110% financing.
If you also want another "30-50000" it will be even higher. It gets worse than that. You would have to encumber your debt-free properties again.

Appreciation has been around 5% in our area over the past 30 years and 10% over the last 10 years despite interest rates back then of over 5%. There are 50 applicants for every building plot and the unsuccessful ones sue against the allocation and if the Greens ban new single-family homes, detached single-family homes will become a rare commodity and I see further increases at least in line with inflation.

3% is an estimate of rental yield here, even though some claim not to buy below 7-8% or some are happy with 1.5% and don’t have to pay penalty interest. I can deduct the interest on the debt and 2% depreciation from the tax office (minus rent).

As incidental costs, only notary and land registry fees apply, which I pay from equity.

I would have no problem registering a land charge for the house and one apartment for the financing bank. For the smaller apartment it is only possible in 2023 or 24.