Annuity loan vs. building savings contract 300k loan

Hello everyone,

I have two financing options for a net loan amount of round about €300,000.00.

The starting point is the question of whether it is better to take a loan at 2.41% and let it run for 25 years or to borrow the money from the bank at 1.41% for 10 years and then reschedule into a building savings contract [Bausparvertrag].

First, I consider which interest payments will be incurred at the bank after 10 years with one or the other option.

For 10 years at an interest rate of 2.41% and a repayment of 3% (loan amount €304,750) = €61,603 installment: €1,373

For 10 years at an interest rate of 1.41% and no repayment, since the building savings contract is being saved instead = €42,969 installment: €358

The difference between €1,373 and €358 would be used to save into a building savings contract.

Costs for the building savings contract over 10 years amount to €5,465 (minus credited interest).

These costs together with the €42,969 interest costs amount to €48,434.

Savings over 10 years amount to €13,169.
Additionally, a low-interest loan for 10–15 years, which is also 1% below the 25-year condition.

I am purely instinctively an advocate of a classic annuity loan - apart from that, however, purely pragmatic and rational.

Which option is recommended?
An additional one-time payment of €75,000 would be made into the building savings contract.

Building savings contract saving phase:

Contract data:
Minimum savings balance 40% of the BS
Monthly interest and repayment contribution €1,200.00
Nominal interest rate p.a. 1.25%
Desired payout date 01.05.2028
Building savings sum €300,000.00
Contract start 05/2018
Account fee (saving phase) yearly €15.00
Calculation of building savings sum

Data on the saving phase:
Completion fee €3,000.00
Variant price €300.00
Credit interest p.a. 0.1%
Capital gains tax not considered
End of saving at payout
Waiting period until allocation 7 years, 4 months
Allocation reached 10/2025
Payout 06/2028
Total savings contributions and advance payments €196,800.00
Total credited interest €1,335.22
Total fees €3,465.00
Building savings balance at payout €194,670.22

Savings contributions:
One-time €75,000
Monthly from 06/2018 - 05/2028 €1,015.00 (total €121,800.00)
Total €196,800.00

Many thanks in advance for your efforts and a good start to a successful week.

Best regards

Where do the 75000€ come from and why are they not included in the annuity variant?
Also, the question is, what is the rate after the 10 years?

Hello Musketeer,

first of all, thank you for your response.
75k counts as equity - in the annuity loan variant as well.

Is this the equity that you contribute at the beginning? 375K€ total costs - 75K€ equity = 300K€ loan amount If you do not contribute the equity directly to the building savings contract, but instead deposit it into the building savings contract, shouldn't you then take the loan amount of 375K€ and also the building savings amount that high in the building savings contract? Or am I misunderstanding this?

Have you ever offered yourselves 15 years? You should be finished with 3% repayment by then.

Hello Musketier, Hello HilfeHilfe,

Is that the equity you contribute at the beginning?
375k€ total costs
- 75k€ equity
= 300k€ loan amount

Exactly, yes.
In the meantime, we have agreed on a final purchase price (330k) - the total amount including incidental costs is therefore 358,050.00€.
Minus the 75k (up to 100k could be contributed in cash), we are now talking about a financing requirement of 283,050€ (round about 280k).

Primarily, I was initially interested in a "weighing of interests" between a building savings contract and an annuity loan.
I myself cannot identify any particular reason, but I simply have doubts about the building savings option.

Thank you very much and best regards.