Special repayments or investing in the market? Alternatives?

you benefit from the increase in value of the property in the event of a sale regardless of how much you have repaid, because the remaining debt is an absolute amount and does not change relative to the market value of the building.

We have taken a middle-ground approach so far. The main loan was repaid early each year over the last 8 years with a maximum of 5%. (However, we still have a significantly higher interest rate of 2.9%). The rest was invested in a global ETF in recent years. This year, we made extra repayments of over €20,000 on the KFW loan (which is still eligible for special repayment), as it matures in 2023. The money for the remaining repayment is actually available. However, I am torn about when to make the early repayment of the remaining amount. From a purely economic perspective, it would probably have been more sensible to simply extend the loan and instead invest the money in a world ETF. At this point, head and gut have different opinions. For me, it feels strange when the portfolio reaches a certain size where a 50% drop (based on annual income) would hurt financially. With a normal investment, you would then allocate a portion to RK1 (e.g., fixed deposit/daily allowance) and a portion to RK3 (stocks, equity funds/ETFs) according to personal risk tolerance. Once the RK1 portion has grown accordingly and is now non-interest-bearing, I have always asked myself why not use the money for early repayment instead of having it lying low or non-interest-bearing in a daily savings account? That was the point when the KFW loan also received its part of early repayment. But if you then put a portion in a daily savings account for security, then

Unlike the stock market, real estate is not that volatile.

Yoah, it depends. Real estate is just as volatile. Most of the time you just don’t notice it because you can’t regularly check the value. The volatility goes both ways here.

Example: About ten years ago, a nice new development area was opened up in the neighboring town. Most building plots were quickly sold and built on with nice single-family houses. The last larger plot was bought by a Southeastern European extended family, who built an apartment building on it and moved in with 20 people. Quite quickly, several houses owned by local doctors and lawyers were up for sale—with significant loss.

Example 2: We bought our apartment (virtually new construction) at 2500 euros per square meter and were annoyed at the high price back then. Currently, there are several new construction projects for apartments in town at 4000 euros per square meter. Last month, an apartment in this complex was sold for 3300 euros, and the buyers consider it a bargain since the other apartments are more expensive.

We have made special repayments of over €20,000 on the KFW loan (which is still subject to special repayments with us) this year, as the loan matures in 2023.

Which KfW loan is it? If it was taken out in 2013, I should also be able to repay one. Or is only full repayment possible?

As children of a high interest rate era, we expect a secure investment return that exceeds the inflation rate. We need to break away from that. There are investment risks, which is why a discussion comparing individual approaches is less productive than considering an investment strategy that includes the aspect of risk diversification and, of course, the repayment trade-off. Enough has already been said about that.

Which KfW loan is it? If it was taken out in 2013, I should also be able to repay one. Or is only full repayment possible?

I believe this is the KFW153 (Energy-Efficient Construction) for KFW70 houses or better. Both partial and full repayments are possible free of charge. For partial repayments, the amount must be in multiples of 1,000.

PS: The unfinished sentence in post #68 was not intentional. That happens when you rewrite again and get interrupted.