Special repayment KfW or save funds

2019-10-30 11:15:28

That will have to be seen then.

With the surpluses generated by the questioner, one always wonders what to do with the remaining money. The home financing is calculated without special repayments and is in a good position, so why forcefully repay it early? It can still be done if interest rates change (although then fixed deposits/daily deposits would also beat the mortgage interest rate again, ...).

Diversifying is always good if there are no special reasons against it. Forcibly putting everything into the house is, from the perspective of wealth building, not sensible.

2019-10-30 11:50:35

What would you prefer? - In KfW (save 0.75%) - In funds / ETFs (historically about 8% return p.a.) - Conclude a building savings contract (through an acquaintance without employer / 1.9% interest)

My personal decision would be the special repayment. Because that is a forced saving, where the money used can no longer be spent for other purposes. Most customers love the special repayment options (and of course also pay for the option in the terms), but never use them. The money then rather goes into other projects / knickknacks. However, if you are considering spending money occasionally or your liquidity is tight, then the ETF would of course be the more suitable option. Or maybe split 50/50?

2019-10-31 06:35:30

Why dilemma? Free liquidity for investment or special repayment is a luxury situation. On the one hand, of course, one should know how to handle money and not squander it. On the other hand, a property naturally represents a concentration risk. With all other investments, one tries to avoid that and would never put 100% of one's investment into a real estate fund. Thirdly, one creates an additional liquidity reserve for extraordinary emergencies (e.g. long illness, unemployment, and disability insurance). Of course, I don’t mean for a broken car, washing machine, and the like. A basic prerequisite for the consideration should be that an interest rate increase does not knock you down after 10 years, as it can well be that after 10 years the prices are just at their lowest point. With over €5000 special repayment and a remaining debt of €65k, I don't assume that an interest rate increase would lead to ruin. On the other hand, it should of course not be a 100% financing. Wasn't it you who took out a loan for a car next to the property?

Yes, but if you save instead of making special repayments, that money can be used for other nice things. Yes, partly financed the car because we are waiting for a fixed cash amount (severance signed). We have never saved instead of making special repayments. Always made special repayments.

2019-10-31 08:14:42

yes, partially financed car because we are waiting for a fixed cash amount (settlement signed). Never saved but always made special repayments. Always made special repayments

You are really convincing yourself.

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Special repayment KfW or save funds

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