Prepayment Penalty for Loans vs. Current Interest Earnings

It also depends on the total assets.

If the financing was tight and the follow-up financing could break your neck, it makes sense to pay off as much as possible so as not to lose the [Immo]. The disadvantage is that the entire wealth is then tied up in the [Immo]. But you can't really eat that :-) Those who can afford it should also build wealth in other ways, for example through stocks(-ETF).

It also depends on the total assets. If the financing was tight and the follow-up financing could break your neck, it makes sense to repay as much as possible so you don’t lose the property. The disadvantage is that the entire wealth is then tied up in the property. But you can’t really eat that :) If you can afford it, you should also build wealth in other ways, for example through stocks (ETFs).

My ETFs and stocks that are currently at a loss I also can’t eat or sell. But I know what you mean. You just have to live somewhere. But eventually we all reach the point where, whether you want to or not, you can’t put everything into special repayments or repayments because the maximum has been reached. More than 5% repayment and special repayment just isn’t possible. Whether now or in 5-10 years. In any case, you have to think about what to do with the rest if you don’t want to spend it wildly.

Stocks are liquid, real estate is not.

I believe that if you maximize special repayments and amortization AND can also invest elsewhere, you have a fairly comfortable situation, right? :-)

Stocks are liquid, real estate is not.

I believe that if you maximize special repayments and amortization AND can invest elsewhere, you have a pretty comfortable situation, right? :)

That is certainly true if you can do that. I know some acquaintances or family members who have been going "full throttle" for years and still have something left over on the side. Eventually, that becomes inevitable.

Stocks are liquid, real estate is not.

In particular, you can sell part of a stock portfolio. With real estate, only with highly dubious companies. Financially, of course, it is ideal to do otherwise, but due to partial sales, it is not the end of the world in case you have to sell something at a loss.

I see the problem simply that you need the money at a very specific time. My MSCI World is currently in the negative. If I had to repay the loan right now, that would be unfortunate. Our special repayments have been sitting in the account the last few years because we wanted to stay flexible. But we will then also invest them in fixed-term deposits.

The timing is right, that's the big catch. We still have 20 years, so for now we're just saving up, and when the repayment gets closer we'll watch the market and consider possibly pulling the money out of the portfolio a bit earlier if it's doing well. If that doesn't work and things really go badly toward the end of the fixed interest period, we're also considering taking over the remaining debt under particularly flexible terms in follow-up financing and then paying down quickly once the market has recovered.

Overall, we are basically relying on the fact that although the market sometimes has dips downward, it has always recovered in the long term so far.