Special repayment, saving or consumption?

Who has really closed for 10 years? Most are at least at 20 years. That means I am not forced to refinance after 10 years. If I now save in ETFs in parallel and know that I want to repay a larger sum in a good stock market situation, then I do not refinance after 10 years, just see how the stock market is doing and then make a full termination or a partial termination. The accumulated capital does not fall from the sky. With a 20-year fixed interest period, you have 10 years to find a good time for the partial repayment.

that is absolute nonsense

My girlfriend has insights into the financings of the current builders in our area (70 building plots).

THE MAJORITY have loans with 10-15 years fixed interest periods. There is only one reason for that: the interest rate is cheaper, so I don’t have to repay as much monthly and have more money for consumption.

Let’s not kid ourselves.... In the end, it’s just cooking the books to convince yourself that you don’t have to “save” or “repay” that much in order to consume more. That’s exactly how it works nowadays... No one needs to tell me otherwise (please don’t take this personally...). The majority today simply does it exactly like that!! Because of this, there will be so many forced sales in the next 10-20 years like never before.

I know homebuilders who know they are paying off their 30 years, but actually only signed up for 10 years. Reason: longer costs too much

That's exactly how it is and that's exactly how the majority do it. I look around our new development area and ask myself: How the hell can you afford this? How do you do it? Most homebuilders are so incredibly naive when it comes to financing. The view into the future is so far away!! But these are precisely the homebuilders for whom half the garden is created by the landscape architect right after the shell construction.

Sorry for the harsh words.. But what is going on nowadays is unbelievably intense..

Who really fixed the term at 10 years? Most are at least 20 years. That means I am not forced to refinance after 10 years.
If I now save in ETFs in parallel and know that I want to repay a larger sum when the stock market situation is good, then I do not refinance after 10 years, I just look at how the stock market is doing and then do a full termination or a partial termination. The saved capital does not just appear out of thin air.
With 20 years fixed interest, you have 10 years to pick a good time for a partial repayment.

I fixed the term at 10 years a) because 10 years was the cheapest and b) I absolutely wanted to manage it in 10 years

What you also absolutely have to consider when comparing special repayments and wealth building with stocks / ETFs:

- The ETF return has to be significantly higher than the interest portion paid, which is reduced by the special repayment
- Shortening the loan term through special repayment and being able to say sooner "it belongs to me and not the bank"

I think if you compare all these points, nothing else can come out but that special repayment is the best alternative. I save through special repayment and increasing the instalment
a) about €30,000 in interest payments
b) 20 years of loan term
and c) can then say that something belongs to me and not the bank

I can’t think of any product that could give me more in 10 years.

With some, I wonder if they have a [Goldesel] in the basement. I also know of some who have now taken advantage of the [Tilgungsaussetzung] and were not on short-time work.

For some, I wonder if they have a golden goose in the basement. I also know some who have now taken advantage of the suspension of repayment and were not on short-time work.

Especially with those, I can’t understand how this can happen, since due to Corona one was more or less forced to stay almost entirely at home. You couldn’t do anything or hardly anything -> consumption automatically went down -> more money to save or for special repayments over

Unfortunately, that is an attitude that was very commendable 50 years ago. From a fiscal policy perspective, however, it is not compatible with current and future monetary policy. You always have to have debt in order to build wealth.

Nope, it was about as good back then as it is today or maybe not.
It is more a question of one’s own life philosophy and whether one wants to orient their life predominantly around fiscal matters. So both are possible, you DO NOT have to have debt even if it would be fiscally sensible. I personally don’t like it (anymore).

From a purely economic point of view, you might be largely right, but many private individuals don’t necessarily think like a company that must invest to be successful.

Despite all these calculations and success examples, I would decide individually to what extent I submit my life philosophy to this. The awareness that something belongs solely to me may seem outdated, yet it has a calming effect for many and often significantly impacts one’s own sense of well-being.
My own well-being is not determined by a calculator or the Frankfurt Stock Exchange, at least I try to prevent that as best as possible.

but to say that it has enormous disadvantages is really completely wrong!

… for the predominantly calculating person, these may be understandable disadvantages, then he should absolutely do it that way. For me, it is (was) stress. Today I live easier without it.

Which safe, risk-free investment yields more than the cost of a mortgage?

Yeppppppp, as far as I know as a layman, the answer is: zero… wait, I still have the crystal ball to offer—
Fortunately, everyone can do it in a way they think is right, here as always there are endlessly many perspectives, and everyone feels differently. I have meanwhile switched to the side of this view, because quite honestly, when I was 40-45 I was often envious of acquaintances who had paid off their house. Ok, I traveled the world, treated myself to luxury and installed all sorts of stuff in the house… so I know both sides. Maybe others were envious of me… It probably also depends on the fact that the neighbor’s garden is always greener than one’s own and one always wants the other thing as well.
I am often just amazed at what is sometimes called a "nice" life and mostly hear of vacations, the Caribbean, buying things… while I stare with nice people into a banal and free campfire and don’t miss all that at the moment.