Real Estate

How to buy a house at any age

New apartments in Feldkirchen near Munich
New apartments in Feldkirchen near Munichimago images / Sven Simon

Is there the perfect age to buy a property? If you look at the statistics alone, the answer seems clear. Those who buy a house or apartment for the first time in Germany are on average 39 years old, according to the database of the building finance broker Dr. Small out. Most buyers choose a property between 30 and 50 years of age. That is hardly surprising: the home is usually one of the largest investments in life – so most people take their time to make this decision.

One of the arguments in favor of buying at the end of 30 is that life at this age is mostly orderly. You have usually found a permanent job and center of life where you want to build something up. The money is enough not to live from hand to mouth anymore. Often times, the rented apartment is simply too cramped at this age because there are offspring on the way. Your own house then appears to be the next logical step.

Every real estate financing is individual

But sometimes life also plays out differently and the desire for one’s own four walls only awakens beyond the age of 50. Or much earlier, in the twenties. While young buyers wonder whether they can even bear such an investment, people who are just about to retire are often tormented by the thought that they have already missed the right time to buy a home. The following applies: “There is simply no such thing as the perfect age when it comes to home financing,” says Henrik Prüß, Dr. Klein specialist in building finance. Real estate financing is too individual for that. Nevertheless, there are definitely special features in the different phases of life that home buyers should consider when planning.

Buying a house at a young age has its charm. Anyone who buys a house in their twenties has usually paid off the property before retirement and can live longer without rent. In practice, however, the dream of owning a home fails when young, especially when it comes to equity. As a rule of thumb, buyers should be able to pay at least the ancillary costs for brokers, land register entries and notaries out of their own pockets. They are usually 10 to 15 percent of the total. With a purchase price of 500,000 euros, that’s already 50,000 euros that the buyer has to pay – and then still not a cent of the property has been paid off. “As a rule, only very few interested parties have already saved a sufficient amount at this age. As a consequence, the dream of owning a home can then become significantly more expensive due to poorer conditions, ”says Prüß. Young buyers should therefore not be too hasty and should save a little before they can fulfill their dream.

Higher repayment rates for older buyers

Borrowers who want to fulfill their dream of owning their own property at around 50 years of age usually have more money on the high edge, but at the same time are under particular pressure: in purely mathematical terms, they have less time to pay off the home loan. Therefore, they have to raise significantly more equity in order to be able to pay a larger part of the purchase price in addition to the ancillary purchase costs. Regardless of the age of the buyer, the following applies: Until retirement, there should only be a manageable residual debt. Those who want to buy a house or an apartment at an advanced age therefore often have to be prepared for significantly higher repayment rates, says Dr. Klein expert Prüß.

Much more decisive than when to buy a property, however, is personal life planning and the respective financial security, stresses Prüß. When deciding for or against a purchase, interested parties should also keep an eye on the current interest rate level and market prices in the respective region. “These are always reliable indicators that work for every phase of life and offer the customer a good orientation as to whether a property purchase is currently worthwhile.”

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