Question: 1% repayment and 10 years fixed interest rate. Will the house never be paid off?

In real estate financing, I somehow get the impression that a fully paid-off house by retirement or say in the age range of 60 to 65 years is obviously not even aspired to?

Too often you read calculations with 1% repayment and an interest rate fixed for 10 years. Then the monthly installment is nicely low, but you barely pay off the loan! I don't understand that people obviously calculate like that! What do they think will happen in 10 years? Then I need the next financing and my money has primarily just gone into interest.

Isn't it a goal nowadays to have paid off the house at some point?

Well, I would fix the interest rate for 25 years and in the end the house is fully paid = full repayment. Am I probably way too conservative?

I don't understand that people obviously calculate like that! What do they think will happen in 10 years?

People don't understand their financing; if anything, they calculate with the installment in a way that they can somehow manage it. But not with remaining sums or the like. They don't think about the future at all when their dream of owning a house comes true. The advisors at the bank probably don't think too much about their customers' future either.

A small real estate bubble is building up. ;) In 5-10 years, you can then snap up a nice, young single-family house cheaply at the many forced auctions.

Far too often you read calculations with 1% repayment and an interest rate fixed for 10 years.

Where do you read that?

I only read such things in offers from banks, which are only meant for comparison and are supposed to suggest to the customer, among other things, that everyone can afford financing or that they have a better preliminary comparison. From consumers who introduce themselves here in the forum or elsewhere, I read about 25 years term and corresponding repayment variants.

Hello

I have to agree with my predecessors. The thing about 10 years and 1% was only told to me by the banks (especially the ones with S).
When I asked how it would look in 10 years and how things were supposed to continue then, the dear salesmen started to distract and try to avoid my question as much as possible...

Well, for me that was always the reason to end the conversation.

With today's interest rates, I would choose the longest possible fixed interest period. Whether 20, 25, or even 30 years depends on the individual financing - and on the amount of the initial repayment. Here I would try to start with at least 2%.

Or wait 10 more years to buy a house, then there will be many fancy houses at very cheap prices... :p
Because as the saying goes? One man's misery is another man's joy.

Regards
Micha :cool:

Good, thanks, so I'm not alone with my opinion. I thought these were common financing options, but you really can't offer that to anyone. Of course I would prefer to wait, but as I said: Can someone guarantee that my equity will be worth at least as much in 10 years as it is today (not in monetary terms, but in relation to the property)? Besides, I live today and want to improve my quality of life.

I see it almost the same as everyone here. Just with a small difference. A 10-year fixed interest period is not generally bad or the death of the property. In our case (we are still quite young) there wasn’t much equity, and banks often charge well for a longer term. For us, a surcharge of 1-2%. We preferred to put more into repayment and therefore had less remaining debt after 10 years than with the more expensive 20-year option after 20 years. However, one should not lose sight of the remaining debt. We repay just under 3% with a 10-year term plus special repayments of 3000-5000 per year. And in 10 years, I will see further. Because no one knows today what will happen in 10 years. Just as little as anyone knows what will happen in 20 years.