Special repayment or ETF experiences?

I would invest in ETFs! Better returns and, if necessary, quicker to realize as cash if equity is needed again for other projects. If in doubt, even currently prefer [Tagesgeld] at 3.4-3.75% as an early repayment.

Thank you very much for your opinions. We will probably split it. Part as a special repayment in 2024 and part into ETFs. If the stock markets perform well next year, we can still switch to special repayment in 2025. If the prices are poor, we will just let everything continue.

I deliberately wanted to reduce the overnight money portion because the exemption amount is being used up, and thus overnight money is not worthwhile compared to special repayment.

Thank you very much for your opinions. We will probably split. Part as a special repayment in 2024 and part into ETFs. If the stock markets perform well next year, we can still shift to a special repayment in 2025. If the prices are low, we will just let everything continue.

I wanted to deliberately reduce the overnight money portion since the allowance will be used up and thus overnight money does not pay off compared to special repayment.

If you use up the allowance, you have already done a lot right!
I would do it that way too.

We paid off our loan early because being debt-free was and is very important to me. The bank advisor did point out that we would have a higher return if we invested the money. My husband would have preferred that too, but he gave in for my sake. For me, it’s about the psychological "burden" when I always have in the back of my mind that something is still unfinished. And I felt really liberated when it was done.

I think that’s an important point. The freedom! The money now freed up from the installment that is no longer there can still be invested. People always forget what supposedly slips away on the stock market. As my colleague says, keep going, keep going!

I personally would not try to compensate secure liabilities with insecure investment forms (and an ETF is one, after all), so pay off the loan ASAP and then go into the "ETF rally." At 2.9%, a savings account—nowadays 3.75% is only available at Trade Republic—makes little sense. I recently switched from Consors to Santander and only get 3.3%. However, it's monthly, which somewhat boosts the compound interest effect. Not negligible with a six-figure investment amount. But my loan also runs at only 1.3%, which is why I think it's worth it. Going into ETFs now is just not my thing. Secure liability equals secure investment is my motto. If too little remains in between, I would also consider special repayments.

It's always a matter of perspective. On one hand, private investors are always told not to speculate with borrowed money, on the other hand, the installment can also be seen as a rent substitute. Early repayment would then be comparable to a tenant asking their landlord for a lifelong right of residence in exchange for a corresponding compensation payment. But hardly any tenant would do that.