Special repayment, saving or consumption?

After we discussed so diligently here 2 years ago, I would now like to hear again if everyone would decide the same way as back then. Now that everything is really getting super expensive, I’m glad that we remained so persistent and always diligently made (special) repayments. On 07/30/22 the last installment for the house will be paid, and then we’re done, and I am 41, my wife 33. Given the current rate of inflation, there really couldn’t be a better time. Of course, no one could have predicted that beforehand, but I’m glad we didn’t choose the double burden of repayment and saving ETF. From 08/01 I can calmly set up a savings plan and continue living consumption as before even with the higher prices.

You did everything right. I also want to be done with the loan before 40. That’s when the early bird pays off. Now you can invest money in your personal energy transition if it makes economic sense for you, to permanently reduce ancillary costs.

I think the average person is always well advised to pay off their loan as quickly as possible.

If you consider that the masses take out a loan amounting to 100 times their monthly net income (or more, depending on the rule of thumb), then it already takes 10 years to repay it, even if you put 100% of your net income into interest and repayment. Unfortunately, life is not free.

But keep patting each other on the back about how great you are at paying off a house with above-average income :D

From a purely financial point of view, that certainly wasn't the best decision, low repayment and ETFs might have been better. But I don't know your interest rate and other data. Having debt is actually quite okay.

But you are a good example that it's not just about the financial maximum, but also about quality of life, and your sleep quality is best without debt. So everything is fine.

But no matter what you had done, if you can have paid off a house by 41/33, then you are financially very privileged anyway. Nice thing :)

As you say, there may be better financial options, but I also want to be debt-free as soon as possible. That gives me a good feeling and leaves me a lot of freedom in the future to shape my life as I want. Whether it's reducing working hours, traveling, saving, modernizing the house, putting a pool in the garden, or starting to smoke (joking). In our case, having €1200 net more per month available is a nice thing I'm already looking forward to, even if the €1200 won't be worth as much soon.

We have been able to make relatively many special repayments over the last 2 years due to good circumstances and now have a very relaxed situation. The KFW loan is now gone, so the total monthly rate is now slightly lower. At the same time, we have also invested quite a bit in the [Depot]. The balance is now larger than the remaining loan balance. Currently, the goal is still to be done by spring 2025 (i.e., 10.5 years after moving in). Alternatively, we could also let it run until the end of the fixed interest period in 2028 and would then still have a four-digit remaining balance. PS: We definitely have not had above-average salaries in the past.

I think the average person is always well advised to repay their loan as quickly as possible.

Not necessarily. It depends on personal life circumstances and attitude. What do I know about what will happen in 20 years? Will I still be alive then? Will I be in good health? For us, it was always clear that we never wanted to give up all the other nice things in life for the house. We are not at all in favor of saying, "We'll treat ourselves to this and that later." Unfortunately, for too many people, that "later" never comes or is very limited. And even now, in our mid to late 50s, we have financed in such a way that we can still travel and consume. We will probably never pay off the loan in our lifetime, but we don’t care. Then the children simply inherit a little less. But there is still enough left from pension and retirement for the other things. However, we set a somewhat higher repayment rate for the KfW loan and fixed the second loan for 20 years. Over a year ago, most people here also recommended not to do that. I’m glad I did it anyway.

PS: We definitely don’t have above-average salaries.

We also don’t have above-average salaries, but probably had above-average equity and therefore a relatively low loan, partly because we limited and held back during the house construction.
And you simply made above-average special repayments.
Many just build more expensively than necessary and have some luxuries for that. I also count things like electric shutters among them. Nobody needs that, you can also do it with straps, it just doesn’t look as good and you always have to raise and lower them by hand.
Everyone as they see fit, but you don’t have to complain if you have to pay off the luxury house until retirement. (does not apply to everyone, but in recent years there have been several who do not want to restrict themselves).