Who would not like to live in their own home and thus retire debt-free? The old-age benefits are continuously decreasing. Since own property promises a very reliable insurance in old age. For example, rent-free housing is generally regarded as an important component of private old-age provision. But many are of course wondering if it is even possible to retire as a homeowner debt-free and rent-free. The very simple answer to this question: Yes, it is possible! All you need is a matching repayment on your real estate financing or mortgage lending.
The statistics provide good proof for this: over three quarters of homeowners manage to retire without debt on their home. So this is a realistic goal that you should strive for, so that the dream of your own property even in retirement provides security and security. Therefore, it is highly recommended to think about the right repayment already at the first planning of a real estate financing or mortgage lending. The aim of these considerations should be how you can at least largely pay off your house until retirement.
In the real estate financing choose the appropriate eradication
In order to be able to retire without any residual loans in real estate financing, you must choose the appropriate repayment . How much the repayment rate should be concrete, results from the period in which you want to pay off the loan. Two parameters play the decisive role:
- Your age when buying the property and
- the interest rate for your real estate financing.
The younger you are, the longer you can pay the building loan. From this longer period, it follows logically that the appropriate repayment, or the monthly installment for the construction loan, can be chosen lower. Or with correspondingly higher repayment installments, the loan amount of the mortgage lending has just been repaid earlier.
The right repayment: paradox at low interest rates
The lower the interest rate on real estate financing, the higher the appropriate repayment should be. The current low-interest phase thus offers optimal conditions for rapid eradication. In this context, however, a paradox emerges that you should consider: the lower the interest rate on mortgage lending, the longer the repayment of the construction loan takes with an annuity loan. This sounds paradoxical, but has the following reason: In an annuity loan, you make monthly a fixed and always the same amount for the operation of the real estate loan. This monthly loan installment is composed of the interest portion and the repayment portion. As the maturity of mortgage lending increases, the interest portion decreases, increasing the repayment portion. It follows that with a low interest rate, the increase in the repayment installment is correspondingly lower. In other words, you need more time to repay the loan.
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It is therefore advantageous for you to agree on the highest possible repayment installment from the beginning on the currently historically low interest rates. A high and rapid appropriate repayment is one of the best investments. It is also advisable to conclude real estate financing or mortgage lending for as long as possible. This gives you long-term planning security and a long-term advantage from the current low interest rate. With a long fixed interest rate you have after 10 years under § 489 BGB the opportunity to pay the building loan in whole or in part, without a prepayment penalty.
Determine the appropriate repayment for real estate financing
In a first step, let our mortgage calculators calculate how much house and real estate financing you can afford. Because this is the basis for being debt-free in old age: Get a realistic picture of your financial possibilities. Keep in mind that you will have to pay off your home for many decades and do not overestimate yourself and the cost.
How much the appropriate repayment can or should be chosen and how many years you need for the repayment of the construction loan, calculates our repayment calculator with a few clicks. The following example is a first, simple illustration:
If we assume a loan amount of 150,000 € and a borrowing rate of 1.5% for a real estate loan, this is the building loan
- with an initial repayment of 2% and a monthly installment of € 435 repaid in 37 years,
- with an initial repayment of 4% and a monthly installment of € 690 in 21 years and
- with an initial amortization of 5% and a monthly installment of 810 € already in 17 years
The right repayment and the possibility of flexible special repayments
Consideration with regard to the appropriate repayment are optional special repayments. Usually, financing partners offer the opportunity to make special repayments. In most cases, 5 to 10 percent of the original building loan is agreed as the maximum possible amount for special repayments in the case of mortgage lending or real estate financing. If you can take advantage of this opportunity, you have paid off half of your home after 5 years with 5% special repayment. In order to do that, it is best to include a buffer in your funds.
Amortization rates offer flexibility for the right repayment
During the interest fixing of a building financing or real estate financing, a lot can change over the years. Whether in the family situation, in the workplace or in income, the situation is often different after a few years than when the construction loan is completed. That is why the customers benefit from DTW | Real estate financing at numerous financing partners on the possibility of changing the repayment rate during the interest rate commitment so that the appropriate repayment to the changed living conditions fits.
Individual advice for your real estate financing
Depending on the selected borrowing rate, you can use our mortgage lender to calculate the imputed lease term of the mortgage and the total costs. For the period after the end of the set fixed interest rate is the repayment calculator , a fictitious repayment plan created.
Benefit from the individual advice on mortgage lending from DTW | Real estate financing. Take advantage of the free and non-binding online pre-inquiry or call our free service hotline . The consultants of DTW | Real Estate Financing will work with you to find the right real estate loan from a variety of financing options.