Bank credit is cheaper than KfW credit.

Hello everyone,

we want to buy a used house for €250,000. Plus ancillary purchase costs and renovation measures, we come to €300,000.

The equity amounts to €100,000. So we will take out financing for €200,000.

We had already received general advice from the bank regarding credit. I asked about the [Kfw-Kredit 124], which everyone gets (€50,000).

The bank said that the [Kfw-Kredit] is not worthwhile because the bank loan interest rate is cheaper. That makes sense. But can it still be advantageous to take and combine the [Kfw-Kredit]? For whatever reasons?

Have a nice football evening,
Volkmann

Hello,

you have a very good equity ratio and accordingly good bank terms. There are customers with little equity. In that case, a KfW loan is worthwhile.

To be honest, I don't see any advantage in taking the Kfw 124 in such a case. With the 124, you cannot make special repayments and are hardly flexible. Therefore, my vote would also be for the bank loan. Maybe @toxi or @DocSchnaggls have a tip.

Exactly, special repayments would be important to us. Especially in the first (10,000 €) and second year (possibly 5,000 €) we want to make special repayments. If that is not possible with the Kfw, then it is unattractive.

The 124 program hardly makes any sense, unless you want to include a few repayment-free years, but in my opinion, that makes no sense at all if the financing is not tight. Such a renovation also consumes more from the current income than one might think.

But what about energy efficiency? Should it be a Kfw70 or even better? Then there are nice renovation programs at KFW that can be interesting. (Programme 151,152 die Ecke)

Hello,

regarding the topic KfW, I have nothing more to add to toxicmolotows' post.

I would only recommend that, in addition to the inquiry at the bank, you also ask two or three large life insurance companies.

Since they currently have real problems generating interest on the invested funds in such a way that they achieve the guaranteed minimum return for the policyholders, they offer very attractive conditions, especially for borrowers with good creditworthiness and thus low risk.

With us, the insurance conditions were even significantly better than my employee conditions at the bank.

Also very attractive is that the insurers have no problem with fixed interest terms of 20, 25, or 30 years.

Regards,

Dirk