Is a bullet loan and ETF currently worth considering?

Currently, due to the low interest rates, corresponding construction financing is cheap to obtain. What currently speaks against, for example, handling a partial sum of the construction financing via a bullet loan and putting the actual repayment rate into ETFs or into a fund savings plan over the term? For example, €50,000 over 10-20 years as a bullet loan which is already running now via an old capital life insurance contract concluded before 2000 and thus would be "safe." And putting the saved repayment amount of, say, €200 into an ETF/fund savings plan? It is somehow a 50/50 bet, but since the bullet loan is basically already secured now and the life insurance would still run for 20 years, the risks would be manageable, right?

So you write that the repayment is safe anyway through the life insurance, which is so old that a) it has a higher guaranteed interest than the current financing interest rate and b) it is tax-free. Therefore, I would do it! Why: 1) By saving through ETFs, you should definitely have more money at the end than you would have repaid otherwise! 2) We have an inflation of 1.5-2% p.a., meaning prices continue to rise, and thus companies also gain in value. Risk: It can happen that you do not reach the goal after 10 years, but maybe you are well in profit after 8 years, in the red again after 10 years, and well in profit again after 15 years. BUT, this is irrelevant for you since you do not need the money after the fixed interest period ends (because it is secured with life insurance). Therefore, I would say that because of the flexibility, the risk here is almost zero! In my circle of friends, many choose 1-2% repayment and another 2-3% repayment flows into ETFs. The people then look for an exit from the ETFs 2-3 years before the fixed interest period ends, trying to find a good exit, possibly earlier. In the end, the residual debt should be smaller than if they had chosen a permanent 3-5% repayment. PS. Musketier has already given some good suggestions here

Purchase incidental costs are always lost, with every transaction (buy/sell).

But let's assume 20% equity. Then this equity is leveraged by a factor of 5. That means if I make a 20% loss on the house sale, my equity is already gone.

Crazy, isn't it! Has everyone ever consciously realized this?

Now the borrowed capital is also being attempted to be covered by an interest rate differential business (a bet!).

Such a thing is called a hedge fund under other circumstances. Such a thing cannot be bought by a normal citizen investor, only by an institutional investor. For good reason!

But you yourself are at least as smart as these investors who care about nothing else. Or not?

PS: An important difference: if the hedge fund suffers a setback, it is usually systemically relevant (TINA), the public sector then steps in. But the small investor is not!

Purchase additional costs are always gone, with every transaction (purchase/sale).

But let's assume 20% equity. This equity is then leveraged by a factor of 5. That means if I make a 20% loss on the house sale, my equity is already gone.

Crazy, isn't it! Has everyone ever consciously realized this?

Now the debt capital is also tried to be covered by an interest rate spread transaction (a bet!).

Such a thing is called a hedge fund under other circumstances. Such a thing cannot be bought by a normal citizen investor, only by an institutional investor. For good reason!

But you yourself are at least as smart as these investors, who don't care about anything else. Or not?

PS: An important difference: if the hedge fund suffers a crisis, it is usually systemically relevant (TINA), the public sector then steps in. But also for the small investor?

um…

so we are talking here:

Capital:
1. 50,000 EUR loan, which is secured by 50,000 EUR life insurance (so at the end there is 0.0 EUR residual debt! What you invest here in ETFs comes on TOP!). If you read through all of this!!!! So you invest the money that you would normally save during the repayment phase anyway!
2. My acquaintance repays the loan (as is currently usual for repayment!). They can save more, and there are 2 possibilities:
either as a special repayment to the loan, or into ETFs, and if the ETFs have grown well, that can be used as a special repayment.

Costs:
if you have dealt more closely with the subject, you know that you can easily manage with 0.1-0.2% costs!

Selection:
you should also deal with it thoroughly and invest where you have knowledge about it.
So I have been doing this for over 20 years, and what is invested is what I can long-term live without. My portfolio halved in the 2000s but now I am fully back in profit, with a return after costs that is over 8% per year... (net)

Hedge funds do something completely different... They invest risky borrowed money...
and that was never the TOPIC here!!!!

You can call it a hedge fund if you buy a house for 200,000 EUR, take out 250,000 EUR, pay 200,000 EUR for the house and invest 50,000 EUR in stocks!

Everything is basically correct as Hyponex wrote it.

I basically have the choice or it comes down to 3 variants...

Variant A: I just let everything run and repay the loan with the life insurance at the end of the term. The theoretical prepayment that is available to me annually/monthly I use for an ETF and hope that after the fixed interest period and costs/taxes I make enough profit with the ETF that I come out ahead, or that I save/keep as much of the life insurance as possible.

Variant B: I stubbornly put all prepayments into the loan every year, repay it by the end of the term, and enjoy my life insurance that I receive paid out.

Variant C: Is the same as variant A with the difference that the ETF makes a loss at the end of the term, I take the life insurance and repay the loan, and still play around with the ETF for a few more years until it hopefully is back in the plus.