Is it feasible to buy a second house with a mortgage on the first house?

Who owns the house? The elderly couple? They could also give you a loan for the purchase if they don't need the money immediately.

Basically, we "don't need" the additional house. However, the thought that my daughter can later follow her path without financial pressure is very motivating.

Apart from the idea of buying a house, I find this consideration very commendable: that you want to relieve your daughter of financial pressure shows foresight and prudence. I just don’t have a clear picture of how your path looks – as I said, aside from the house purchase plan. Maybe you can break down your expenses further, because I suspect or hope there is some provision in there: disability insurance, ETF savings plan to fill a possible pension gap, term life insurance to secure the remaining loan, and so on. That would be my idea of how to try to stay financially independent in order not to be a financial burden on your child in the future. I think breaking it down would provide more insight into your planning and thus how much or little strain and stress the combination of a second house and financial relief for your daughter means.

We will also try to give our child a good start in life. But that does not mean that you take over (the burden) of a half-paid-off house, but that you enable education/vocational training/university studies, so that the children can be the architects of their own fortune. Who knows whether the children want to stay in their hometown or move away. Maybe they don't want to be immobile at all. Besides, I agree with Frechdachs, you should primarily secure yourself so that you are not a burden on the children. As a cautionary example: A good friend financially overextended himself with the conversion of a former barn section into an apartment in the parents-in-law's house to the extent that there was not enough left for the essentials. Later he shared that during that time he felt so bad because he had to refuse his daughter's wish for an apple at the supermarket.

Maybe you could break down your expenses further, because I suspect or hope there is some provision in there: disability insurance, ETF savings plan to fill a possible pension gap, term life insurance to cover the remaining loan, and so on. That would be my idea of how to try to remain financially independent in order not to be a burden on the children’s finances in the future. I think breaking it down would give more insight into your planning and thus how much or how little burden and stress the combination of a second house and financial relief means for your daughter.

We have a life insurance policy and invested a small amount in bitcoins years ago. It’s not much, but it is something. Financially, we actually don’t have anything more at the moment. What comes from the parents sometime or doesn’t comes plays no role in our planning. I don’t want to break down our expenses further at the moment. Regards

Whose house is it? The elderly couple’s? They could also give you a loan for the purchase if they don’t need the money immediately.

Getting the money for the purchase, I don’t see that as so critical. You’ll definitely find a bank willing to take it on, the risk is manageable. 250,000 EUR purchase price, plus 60,000 EUR gift tax (worst case estimated), that’s 310,000 EUR. The house is worth 450,000 EUR, so the bank is safe.

But 310,000 EUR loan means a payment of 1,500 EUR. Easily. Then another 400 EUR for the old loan, so from October there is 3,500 EUR - 1,900 EUR = 1,600 EUR left to live on. And that doesn’t even include additional costs for 2 houses...

So you own 2 properties and go scavenging in dumpsters for refundable bottles in the evening because there’s never enough. Even a broken washing machine can already bring such a setup down if PayPal refuses installment payments due to the income situation. If something bigger breaks, like the heating... then good night... and then the relationship with the relatives is ruined too, because they sit in a cold place since the "landlord" can’t buy a new heating system, he has no money and can’t get a loan.

And the additional costs for 2 houses are not even included yet...

Only for one house. Wohnungsrecht means that ALL additional costs must be borne by the entitled person. This also includes minor repairs.

because it just doesn't add up.

Yep. That's what I meant by mathematically no problem for the bank. In real life, it can get tight.