Opinion financial plan

Hello everyone,

after I have already learned a lot of useful information about financing here and have seen that members have been given advice on their financing plans, I would also like to try my luck.

So: We (man + woman, both civil servants in higher service) want to buy a house for the price of 480,000 euros (plus approx. 30,000 euros ancillary purchase costs). Our equity, minus renovation and refurbishment work on the house, amounts to 160,000. We want to finance 350,000 euros with a classic annuity loan for at least 20 years with a monthly rate of 1,500 euros.

The following offer is the cheapest so far:
Nominal interest rate: 2.98%
Effective interest rate: 3.08%
Term: 20 years fixed interest period
Remaining debt after 20 years: 143,348.05 €

I would like to know what you think of this offer and look forward to your opinions!

Many thanks and best regards
*alice*

Interest rates are within the current market range.
What about special repayments?

Considering the outstanding debt after 20 years, it is up to you whether you can live with it.
It also depends on your age.

Ideally, you should add another €250 per month on top. That would then already be a payment of €1,750 per month.

If you look again at the outstanding debt with one eye, it should still be considered whether an additional fifty or so can be added.

As a rule, you should not commit yourself to such a loan for more than 30 years in total. Then nearly €150,000 will have to be paid in the last 10 years. That will be challenging. And paying again for another 15 or 20 years after 20 years would at least not be my thing.

Thank you for the quick opinion. We earn about 5,300 net together, the private health insurance has already been deducted here. We are both in our early thirties. We actually do not want to increase the rate.

Our offer includes a [Sondertilgung von 5 % p.a.].

Well, what more is there to say?

As already mentioned, normal interest rates but high remaining debt.

Whereas the remaining debt can certainly be managed over the next 10 years. But whether one wants that ... .

Hello Alice,

I think the interest rates are absolutely okay and market standard, but the high remaining debt item would make me a bit nervous. I understand that you don’t want to increase the monthly installment (early 30s.. kids? Or possibly planning for it?). But you should try to add quite a bit of special repayment during the year. Maybe you’ll get Christmas bonus/tax refund.. you should then definitely plan for these mentally/fixed. That way, with only 3000 - 5000 € special repayment per year, you end up with a whole lot less at the end.... not even counting the interest advantage. And with the monthly burden, you should still have something left over to treat yourself to one or the other vacation :-)

Regards,
Naddl