3 financing options for 300,000 euros: Which is the best?

Don't worry!

Hello Leon,

we are currently comparing as well. The amount we need will also consist of several parts. The large amount the bank will provide has been divided again. Once about €100,000 with a 10-year fixed interest period and once about €100,000 with a 20-year fixed interest period. The plan is then to really be able to finish the 10-year loan with special repayments after 10 years. That will give us a lot of 'breathing room' in the further financial planning, also for the remaining amount that will be left after 10 years with the L-Bank loan. Who knows what the interest rate will be then. Variants with building savings contracts and residential Riester were also offered to us. Although that did not really convince us.

Regards EarlGrey

My independent financial broker explained Wohnriester to me. If she didn’t tell me any nonsense... and I assume she didn’t... the story with Wohnriester is pure madness and ultimately doesn’t pay off (except with 6-8 children). I have also been convinced by bank loans and KfW credit. Surely, there are many who see it differently.

Sure, the banks always argue in a way that sounds great to us customers. Of course, you have a tax advantage with the Wohn-Riester and naturally you can achieve a fixed interest rate over years with a long-term building savings contract. But it must also be clear that you don’t get anything for free. Because through the additional building savings contract, part of the bank’s risk is shifted to the building society and the tax advantage must then be repaid monthly upon entering retirement age. The risk minimization should make it clear why the banks argue this way. In addition, the building savings contract brings the bank a bonus. Even if, as with our Sparkasse (I specifically asked), the individual employee does not get a bonus for concluding a contract, all employees have a success-dependent bonus in prospect at the end of the year if revenue x is reached. So indirectly there is still an attempt to conclude extra contracts, etc... Unfortunately, we can’t avoid the banks because anyone who wants to build nowadays needs a lot of capital. And the banks are still making a killing when you consider how cheaply they can get money themselves at the moment.

@ EarlGrey Short info about the banks' profit. Traditional mortgage lenders who finance according to the loan term earn about 0.25% to 0.40% on a normal mortgage (without special conditions), which from the bank's perspective is barely above the subsistence level. Savings banks or cooperative banks, which pass on grandma's savings book money (with 0.50% interest there) as loan capital, earn more. Most of these banks, however, bring real problems upon themselves by buying variable-rate money and lending it out (on a long-term average) cheaply. When variable interest rates change, there are refinancing problems. We saw good examples of this in the banking crisis
I know from my job enough smaller banks that for this reason do not offer their own financing anymore, but act as intermediaries instead...

Hey nordanney, your post is in stark contrast to the profit reports I receive every year from my bank. And when I see how they build and remodel every year... something just has to stick! I think as an end consumer people like to complain and banks love to whine on a high level. Somewhere in between, the builder and the friendly gentleman who doesn’t want to sell anything but is only concerned about my personal happiness will have to meet in the middle. And that’s a good thing!