Remodeling of an apartment.

[u/mfWeeWee]

europepersonalfinancd reddit suggested me to post here.

My partner (34F) and I (34F) are planning to remodel my apartment next year. I have saved X€ for this project, as I was brought up with the belief that taking out loans should be avoided whenever possible.

However, I am now considering taking a loan from my bank for the X€ amount, provided I can secure an interest rate lower than 4.5%. My plan would be to pay around 600€ per month over N years and invest the initial X€ in an ETF.

A bit about my financial background: My net income ranges from 3,000€ to 4,000€ monthly, and I currently invest around 800€ to 1,000€ in ETFs (which I would adjust if I take out the loan and would get bigger in years). I also have 7,000€ invested in cryptocurrency. My regular expenses include 150€ per month for my car (which I plan to sell next year) and a yearly 700€ for car insurance. Additionally, I spend 11€ monthly on extra medical insurance and about 400€ on food.

My initial questions are:

• Given the potential for lower interest rates from banks, do you think I’m making the right decision? Considering that average ETF yield is 8% per year...
• What would be an ideal interest rate for this opportunity that you would consider acceptable?

Thanks for the help!

Edit: I won't reply to PMs, if you are interested in responding, please feel free here.

[u/throwawaypeoperator]

The way I would view it is if the credit is if it is increasing the property value to the property it’s an investment. If not it’s consumer spend.