Special repayment, saving or consumption?

but I also want to be debt-free as quickly as possible.

I see it the same way.

In the end, debts are debts. Whether they are worth more or less does not matter to us.

We have arranged our financing for 10 years and will also make sure that, with special repayments and increasing the amortization, we keep the outstanding debt as low as possible in the end.

…I would have wished they consumed less and made special repayments. But they didn't.

That obviously doesn't work like that.. We ourselves make no special repayments and keep our loan installment as small as possible. We don't do that to consume, of course, but to invest/save the money in our own way. We (for now) don't give it to the bank.. we will do that when we think it's the right time.

Of course, it doesn't work like that.. We ourselves do not make any special repayments and keep our loan installment as low as possible. We do this not to consume, but to invest/save the money in our own way. We (still) don't give it to the bank.. we will do that when we consider the right time.

What is that supposed to achieve? If you were to increase the installment instead and additionally make special repayments, you would significantly reduce the term and the interest and compound interest payments. Furthermore, under normal circumstances, you can only make a maximum amount of special repayments per calendar year. So you can only reduce the term minimally if you give the money to the bank all at once at some point. With a low loan installment, you hardly repay anything anyway. Unless you terminate the loan at some point and manage to repay it earlier through installment increase/special repayment. Then the only question is whether the return exceeds the higher interest payments during the term, where you neither increased the installment nor made special repayments.

You can do it that way, but it is risky. The return is not known in advance, and not everyone has the discipline to set aside money monthly for this purpose and not touch the invested money.

Of course, I am only speaking for us.. we have the discipline to "set aside" the money. Our interest rate is also so low and we have a "relaxed" installment that we don't feel the need to pay off quickly. So… if the interest rate rises sharply in 10 years, we refinance.. if the interest rate stays the same.. we continue like this. We have been financing for over 20 years now.. first house… now the second house.. In the first years (when the interest rate was still between 4..6 %) we only chose variable or fixed 5-year terms. They were simply unbeatable back then. We were lucky.. the interest rate dropped every time. The last loan for the "old" house lasted 2 years (the sale was already decided). For the new house, we chose a 10-year loan.

You can do it that way, but it involves risk. You don't know the return beforehand, and not everyone has the discipline to set aside money monthly for this purpose and not touch the invested money.

It depends. We have two savings contracts with guaranteed interest rates of 3% and 4% respectively, and our financing runs at 1.45%. So here I know exactly that my return is higher. Why would we have included the money in the financing? The same applies to ETFs like the MSCI World. Just save regularly and let it run. The chance that the return achieved here is below the financing interest rate is practically zero. Or invest the money in dividend stocks like Telekom; it currently yields nearly 4% as well...

That depends. We have two savings contracts with 3% and 4% guaranteed interest and our financing runs at 1.45%. So I know exactly that my return is higher. Why would we have let the money flow into the financing? The same applies to ETFs like the MSCI World. Just invest regularly and let it run. The chance that the return achieved here is below the financing interest rate is practically zero. Or put the money into dividend stocks like Telekom, which currently still yields almost 4%...

I fully agree, but for me that is the best case scenario. You don’t assume that salaries might disappear, someone becomes unemployed, seriously ill, unable to work or maybe even dies. The house of cards collapses at that moment or it becomes very, very difficult depending on the situation. We are exactly the opposite – worst case scenario – and that’s why we wanted to get rid of the debts quickly. If something should happen, at least no one has to worry financially – the house is paid off and the running costs can be managed alone. In such a moment, those few percent returns don’t help at all if you have a huge debt mountain, no income, and the financial investment is not yet where it would need to be for a payoff.