Are these good conditions for a long-term central bank loan?

General about you:

[*] How old are you? 28 / 29
[*] Are there children? No
[*] Are children planned? Possibly in 4-5 years
[*] What do you do professionally? IT (employed / self-employed)

Income and asset situation:
[*] How much equity do you have? 60000
[*] How much equity do you want to put into the house project? ~32000

Expense situation:

Income and expense totals:

[*] Total income: 3820€
[*] Total expenses: 1472€
[*] Balance: 2348€

General about the property:

[*] How big is the plot? 894 m²
[*] New build, old building (year built), house type? Old building, solid construction
[*] Garages? Double garage
[*] How big is the house? (living area / usable area) 130 / 203

Cost breakdown:

[*] Total costs: 342000
[*] Deductible equity ~32000
[*] Financing amount 310000

Required loan details:

[*] Loan amount 310000

The bank’s proposal would be: KFW (or own product with 10 years fixed interest period) + 30 years fixed interest period.

KFW 30000€

and

280000 €
2.05% nominal interest rate
30 years fixed interest period
Repayment (initially) 2%
Special repayments 5%

Perhaps in advance: the corona year has strongly lowered the figures for self-employment, so the income is correspondingly lower, and within the employed position, a planned change to a higher position is envisaged in about 2 years (the position is explicitly a "development position"). In both areas, we can therefore rather plan with a positive development.

What is especially important to us:

- to have an overview now of what a “good nominal interest rate” would be for our project.

- what you think about the long fixed interest period. In our view, this makes quite a bit of sense, in case of doubt you can cancel early in 10 years anyway.

- for the smaller KFW portion (lower interest, higher repayment) or rather their product with higher interest, lower repayment.

- what is your opinion on somewhat “crazy ideas”, such as 5 years KFW (and then presumably repay with another loan if interest rates rise), interest-only KFW + EFT or something like that?

Thank you very much for your opinion!

Are the total costs the purchase price or the purchase price plus incidental purchase costs? Without this information, the interest rate cannot be assessed. I consider a 30-year fixed interest period to be nonsense.

Thank you for your feedback

Total costs are purchase price + additional costs.

What speaks against the 30 years for you?
It is of course a "bet" on rising interest rates with the option to exit after 10 years (but to pay more interest).

That means it is a 100% financing? Then the interest rate is very good for the term. Yes, of course it is a bet on rising interest rates, in 30 years that may also be the case. But if you, for example, fix it for 15 years, you can repay 3% with the same rate. In 15 years you will then still have about half of the outstanding debt. If you can still service that with speculative, for example, 5% interest, I see no reason to cause relatively high fixed interest costs now.

So it’s a 100% financing?
Then the interest rate is very good for the term.
Of course, it’s a bet on rising interest rates, which may be true in 30 years.
But if you for example choose 15 years, you can repay 3% with the same rate. In 15 years you will still have about half the outstanding debt.
If you can still service that at speculative e.g. 5% interest, I see no reason to fix relatively high interest costs now.

Thanks, that’s another good perspective.
How do I calculate that concretely?
Simply take the outstanding debt after the fixed interest period and enter it as the loan amount in the mortgage calculator with the "forecasted" nominal interest rate. (And the purchase price stays the same).
Because with 5% bedroom my rate would only increase slightly.

Otherwise, there would of course be the possibility to split it (100 KFW + remaining long fixed interest period).
Do you think that makes sense? That way the risk/benefit would be split and KFW is even cheaper => more repayment

Search for FMH mortgage. A very good tool comes up that lets you play with actual market conditions. You can then do a calculation for your remaining debt with any compound interest calculator, you can also simply do it yourself in Excel.