Beginnings of a possible property | Questions about the building savings contract

Basically, your consideration is good if you want security.

But the offer from Signal is not good. The interest rate is much too high in relation to the repayment rate. With an annuity loan, you have a repayment rate of maybe 5% per year (3% repayment, 2% interest or soon the other way around). With this home savings contract, you have a 12% rate per year.

Look for a tariff (at another building society) with a repayment of 4-5 per mille per month. And only then can you actually compare how expensive it is for you.

I thought a repayment rate of 1% is already quite good, especially since I have to pay off the approximately 60k€ anyway. At 5 per mille, it would take twice as long and I assume I wouldn't then get an interest loan at 2,xx % percent.

Are 600 euros per month a lot for 9 years of repayment!?

I have to say that until just now, I thought I had a pretty good understanding of the structure... now I strongly doubt it :/

Now I mixed things up a bit, sorry. Your repayment rate is 6 per mille. It is always based on the building savings sum (100,000€ in your case).

And once again, it depends on your overall project whether a 600€ installment for this single component is too much or not. If you now want to finance not 100,000€ but 300,000€ in total, and the interest with repayment for the remaining 200,000€ is again at a 1,000€ installment, then it gets expensive.

That’s why a financing plan is not feasible without knowing the project. What you are buying is part of the financing calculation.

You are of course right with the statement "...And again, it depends on your overall plan..." only, as of today, I don't know when and what I will buy. Therefore, there is only a rough estimate of the property at 250K€ (max. 300K€). So the 100K€ from the building savings contract are already for the follow-up financing, I wouldn’t then take out a 200K€ loan if the place only costs 250K€. I will first take out a loan for amount X (minus equity), then after 10 years repay it with the building savings contract and then possibly repay the remaining loan monthly and repay the building savings loan. So then I have about 600 euros building savings repayment and possibly repay the rest of the loan (shouldn’t be too high after 10 years) with 2 people, okay, right?!

But that means that you will first have to take out a total loan of €250K minus equity ????.
Of that, at best, €100,000 is bullet loan without repayment – which at 2.5% interest results in exactly €208 monthly interest payment.
The remaining perhaps €100,000 (with €50K equity) as an annuity loan with 2.5% interest and 2.5% repayment results in a rate of €417.
All in all, with the €498 building society payments, that makes a total monthly burden of €1,123.

After allocation, that eases up a bit because the total burden is then only €993.

If the interest rate rises, it will correspondingly increase.

Is this supposed to be an existing property, because with €250K a new build will hardly work?

It will most likely be an existing property, therefore 250-300K€ (equity should be sufficient with 50K€ in 1-2 years).

Worst case: 250K€ (including equity) I have to take out as a loan, in 10 years I should have already repaid 100K€, then 150K€ remain. Of that, I repay 100K€ with the loan from the building savings contract, leaving 50K€. So I don’t really need the annuity loan if I have the building savings contract.

If the total burden is then about 1000 euros for the remaining term, then it is manageable.

Or is this burden too high? With two salaries, it should be doable.