Today, I received the news that my "Payback phase" for my student loan has begun. I was afraid this day would come soon, but it came quicker than I anticipated. However, I got the news that I don't have to pay back yet. I have 2 years until my mandatory payments start, but if I wanted to, I could pay off the loan already. They informed me, however, that the interest rate from now on is already set at 0.46%.
I have 420 months (± 35 years) to pay back my student loans, and every 5 years, the new interest rate will be decided and fixed for the next 5 years repeatedly until the last payment. It could go to 0%, or it could go to 10%. I simply do not know.
Some more context on why I am bringing this up in the first place: My girlfriend and I would like to buy our first house. The housing market right now is really tough, but we do have a chance. However, that chance is extremely restricted due to my student loans. Let's say we could get a mortgage of $250,000, and I inform them that I have a student loan. That mortgage would be lowered by twice the amount of my student loan. So, if my loan is $10,000, then my mortgage would be lowered by 2 * $10,000 = $20,000.
The big problem is that my student loan is $32,288.02, and there is no single way we could buy a "livable" house here for ±$186,000. But we can't live in this crappy apartment for years, and we would like to move on at some point too. At this moment, I have around $6,000 in savings, so that is a start.
I am now trying to figure out the best way to handle this situation. I have a couple of options:
Save extremely hard for the next ±2-3 years (around $600-800 a month) and try to get the entire amount to pay it back in one go. Do nothing and wait until the mandatory payment starts, which will be set at around $90 a month, and pay that for the upcoming 420 months. (Basically, pay it back until I am 59 years old.) Something else?
I really need some advice here to see the best way to go around this. What should I do?