Own home - Planning the property / Financing with income ok?

However, it is pure speculation whether interest rates will be lower or higher in 10 years. The fact is that the European Central Bank [EZB] has been flooding the markets with an additional 60 billion EUR per month (!!!) for over 2 years. Cf. the January 2015 report by [FAZ]: "The [EZB] buys government bonds worth more than 1 trillion euros." It is also a fact that all the southern European countries are sitting on gigantic debt mountains and the [EZB] cannot significantly raise interest rates for a long time, since otherwise these countries would not be able to meet their debt service, and we would have the same misery as in 2008/2009 (by the way, we have already had these low interest rates for that long!!!). Ultimately, it remains a personal calculation exercise: If I finance 100,000 EUR today for 10 years at 1.5% plus 2.5% regular repayment, I pay 333.33 EUR monthly for interest and principal. The remaining debt after 10 years is 73,045 EUR. Then the new interest rate after 10 years may already be almost twice as high, namely 2.98%, so that under otherwise identical assumptions the rate of 333.33 EUR does not change. If I manage to make additional lump-sum repayments of 2,500 EUR per year in the meantime, the remaining debt falls to 46,276 EUR and the new 10-year interest rate on the follow-up financing may already climb to 6.14% (!!!!!!!!!) without the rate of 333.33 EUR changing.... So personally, I do not believe that we will see more than 6% in 10 years because then we would have completely different macroeconomic problems in Europe. And I personally do indeed calculate with special repayments, which are also realistic. But as I said, everyone must decide for themselves based on their personal life situation, their expectations, and their risk appetite what they prefer. If I want 15 years of security, I must be willing to pay a significantly higher interest rate for it.

That is quite a daring calculation. At the end of the term, your repayment is already significantly higher. If you then go back to the initial repayment rate, the projected term will extend quite a bit, won't it?

With the current interest rates, I would always take at least 15 years, they can't go any lower anyway.

I don't find the calculation so daring, however, I only made it for myself personally and optimized it for my individual situation. For example, if I were an employee with a relatively constant income, I would calculate quite differently. That is why the note: everyone has to weigh it for their personal situation.

Only one thing I personally do not believe at all, and this has also been confirmed to me by various bankers involved in the interest rate market (not tellers, but the Asset Controller): We will not see significantly rising interest rates in the next 10 years because otherwise, we would be heading into a completely different crisis. And when I think back, banks were actually already complaining about low interest rates in 2004 and 2006, so we can celebrate a 10-year anniversary.......

Nevertheless, no one can predict or foresee. Only the environmental conditions currently indicate a clear direction: sideways.

I see the interest rates similarly to you. I deal with it daily as well. Above all, inflation rises before interest rates and pays off your loan further.

At that time, we were also called crazy because we only took a 5-year fixed interest rate for "the interest rates." The interest rates were also at a "historic low" in 2012. But I wanted the lowest possible interest rates at the beginning, since the interest then applies to the entire purchase amount - in our case. I did not speculate on falling interest rates at all, but I also did not expect an increase. And now, 4 years later, they have halved again and I am very happy that I can now get out of the contract and benefit from this renewed low interest rate. We still only took a 10-year fixed interest rate, who knows what will happen in 10 years (inheritance? quite possible). But whatever will be, even if interest rates have risen again by then, the remaining debt will be so low that it does not matter. We could have also taken a 15-year fixed interest rate, but that would have been 5000 euros more expensive in the 10-year comparison and I would rather use the money for special repayment than throw it out the window.