If you want to put it that way, I have actually "taken sides" at the moment. Isn’t that a prerequisite for being able to discuss?
Only to a limited extent, as long as you maintain your objectivity.
I calculated to what extent long saving phases for equity pay off and found that it is currently not worth saving up the frequently praised 20% or more equity first. Those who have it anyway can at least safely and quite profitably invest it in the house, but those who have to save for it first apparently end up financially worse off.
Your calculations are fine with your assumptions. However, these assumptions are very closely tied to the current situation, so numerically not stable—the calculated optimal equity ratio (optimal exclusively in terms of money—all other factors like security, risk, quality of life are difficult to calculate) fluctuates significantly with only small changes in your assumptions. So everyone has to look carefully at their own situation (for example, I still have old savings contracts with over 4% interest)—and also consider all non-monetary arguments. By the way, I consider these more important than a few possible percentage points plus or minus.
I can understand the concern about a possible personal bankruptcy, but you do not need a 70% loan-to-value ratio for that reason. Financially speaking, one usually comes out better with a personal bankruptcy because the bank would have to bear the (main) burdens. But of course, I understand the psychological effect as well as the associated loss of quality of life.
However, the protection in the form of equity that has to be saved up is indeed very expensive (construction/real estate prices are rising, capital is poorly remunerated, loan interest rates could rise, you continue to pay rent, etc.). Just because money remains in the end does not mean that no losses had to be accepted.
With personal bankruptcy, it depends on the amounts (debts) whether it "pays off" or is feasible or not. You definitely cannot say that in such general terms. The protection certainly costs a bit, but by no means as much as you suggest. Nowadays, everyone is somehow insured (yes, I also have my house and my life insured), and collecting equity could be seen as insurance, too. Especially since no one has a functioning crystal ball for the future. For example, it could also be that in 6-7 years, with rising interest rates, many people who built without equity will have problems with follow-up financing, and houses will be quite cheap. Lucky is the one who then has equity and can strike. Who knows? Or maybe something else happens? You only know for sure what would have been financially better afterward!
And briefly about my "speculation" (by the way, it is also not very polite to repeatedly accuse the other party of making everything up):
It is especially about speculations that did not concern the topic itself, but for example my reserves and so on (+ more about me and Steffen). And you absolutely made those up ("suspected"); they were even contrary to what we wrote. And demanding restraint there, I consider the polite way.
You have indirectly spent money for protection against a "forced sale" that you are currently missing elsewhere, otherwise, you would pay cash for the car, for example, and not save for it, right?
I have directly spent money and thus have definitely protected myself against a "forced sale." But that money is not missing. It is tied up in the house (I did indulge myself a bit during construction and the landscaping) for quality of life. My car is still rust-free and in great condition. So I keep saving. And when I replace it, I don’t have to spend all the money on a car. I bought my wife a new one last year because the old one didn’t want to cooperate anymore. That was possible because I had so much equity that after building the house, I still had enough money left for it (so I "hid" a bit from the banks—you have to use your equity primarily). With less equity, I would have had to finance the car, and that would definitely have been more expensive overall. Another argument is, of course, flexibility, also during construction. You don’t have to constantly chase bills, approvals, and payment requests, can fairly reliably get the early payment discount (sometimes more by negotiating), don’t have to turn every euro, collect every hardware store bill for own work, and so on. You can also pay some things in cash to the craftsmen.
Please don’t misunderstand me; it’s not about accusing you of supposed "mistakes." My point is that longer saving phases for 20% or more equity do not pay off for today’s buyers because they lose out. Whoever still does so must objectively have other reasons than their own financial interests, and I would like to hear those reasons.
That’s also not how I understand you, even though some of your suspicions didn’t add value to the objective consideration. I still don’t believe I did anything "wrong." Rather, building might have resulted in a less optimal house in a less optimal location because of my family planning/career. See above, the "calculation" or assumptions are not generally valid but special examples. We have objectively explained many reasons to you. I’ll say quite clearly: money is not everything here either (if it were just about calculations, nobody would build a house). I rate many risks higher here (compared to €€€). I believe others do so, too—otherwise, there would be no insurance.
You mentioned personal bankruptcy (like lastdrop already did) as a reason against 110% financing, but in my opinion, it doesn’t necessarily speak for 80% or even 60% and less.
The tenor here is not 50% equity but 25%-30% equity compared to "none."[/QUOTE]