I am currently in the fixed interest phase of my home loan with a very low interest rate and will soon be entering the phase where the loan will have a variable interest rate again for the last 10 years. (The remaining amount will then be around 100k euros)
Interest will then be +1% point premium on the 6-month Euribor.
The Euribor will be somewhere between 0% and 4%. You could take 2% as an average, which would give you 3% interest. Let’s be a little more cautious: it will be 4%.
So I have a loan of 100k euros open with 4% interest and 10 years remaining term.
By the time the fixed interest rate phase ends, I will have saved up around 100,000 euros in liquid assets. (I am not currently making any special repayments because I am getting much more interest on a call money account after KEST than I am paying in the fixed interest rate phase.)
The plan was actually to pay off the loan completely at the end of the fixed interest rate phase.
Now I’m wondering whether I should just let the loan run as normal and pay it off over the course of 10 years and instead invest the money in an ETF (or something else?).
I can easily afford the installments and I also have emergency funds.
I know this is a subjective issue and it depends on my risk tolerance… But what would you do?
Where do you see advantages, disadvantages, risks?
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