We, the hostages of the bank!

Correction: 20% (Otherwise the calculation doesn't work)

We (read: you) still need to practice the percentage calculation, I’m afraid. You probably meant 20% of 125,000. Then you get your 100,000 lending value and thus at 60% of that the 60,000 "secure loan". So much for mathematics.

In any case, my position remains – no matter how meaningful the Schufa ratings may be: the system is completely opaque, yet a bank relies largely blindly on it, resulting in ludicrous valuations and consequently rejections. I speak from personal experience.

That a completely transparent system is easier to manipulate may be true, but the current power of Schufa – setting aside data protection aspects – cannot be what is intended.

As a consumer/interested party/investor, one can also draw conclusions from these (bank) scores and any credit rejections and/or comparatively high loan interest rates: after all, no one stands behind a prospective buyer with a loaded gun and forces them to buy property xy at price z.

Basically, hg6806 is not claiming any less with his purchase at this point in time than that he meets his credit obligations and in 20-30 years, when the financing is complete, will be in a better position than if he did not acquire the property today. So the whole thing is nothing but a bet. It is entirely within the bank’s rights to assess the risk differently. If it (and other banks as well) does so, one can also come to the realization oneself that perhaps a different path should be taken. Either by having better scores in 3-5 years or by organizing one’s situation differently and for example setting up a savings plan with which one acquires an age-appropriate property at about age 65 and can then pay (almost) cash. Then the bank loses the loan business for this property completely. The result is the same: at 65 (at least) one has a paid-off property.

Best regards
Dirk Grafe

Hi and has paid rent until then. Money that is simply gone.

If I pay interest for 30 years, it’s the same thing.... in return, when saving, I even earn interest. And if you want to be clever and safe, 2-3% is no problem. What really matters is how high the rent is. We last paid 800 € rent + almost 200 € additional costs + annual heating cost adjustment. And that for an 80 sqm 3-room apartment with annoying neighbors, constantly overflowing trash containers in a 60s apartment. Here we were almost forced to build ourselves.... because currently our monthly installment equals the last rent. Sure, the additional costs have increased, but in return we have 800 sqm of land, our own house, 80 sqm more space and very importantly: our peace. Only when you look at the last annual statement, you feel sick. Almost only interest paid, hardly any repayment.... We know we should repay much more, but thanks to children, outstanding construction work around the house, and soon a new car, we keep it at 1%. In 2-3 years, the annual special repayments will come... Building is not always the better decision... and actually almost always a financial loss.

Well, 15 years is very noble....

We specifically chose the partial prepayment option. I prefer to keep the money in an account throughout the year and be flexible, rather than getting into trouble if, for example, the car breaks down. But it takes a lot of discipline, I have to admit. I set aside a fixed amount + x at the end of each month.... that's how we managed to accumulate the necessary partial prepayment sum last year as well. However, we deliberately decided against using it, since this year we can hardly estimate what we will need.

Thanks to parental allowance, the government rewards us with a hefty tax back payment, and besides, the garden needs to be done, the car can break down at any time (considering the mileage), and a carport wouldn't be a bad goal.
You just have to keep an eye on it....
With an average of €5000 partial prepayment per year, we'll have the place paid off in 20 years.

Our cabin will be paid off in 15 years. ... But so far I haven't paid any rent either.

Of course, it's easy to say regarding "Rent is money that simply disappears" and "Paying interest for 30 years is a bad idea."