Build big? Or continue renting?

The KFW loans are extremely affordable and can be fully repaid by us at any time.

So it comes down to the right mix of KfW and annuity loan for the financing, possibly with an earlier repayment after 10 years if my parents' house were to be put up for sale

Hello,

KfW should be included in the financing, but preferably only choose one KfW loan. You can use this program if you build energetically efficiently according to KfW standards. Basically, you could also take out a low-interest loan for home ownership. Each €50,000. Also combinable.

The disadvantage of the loans is that they only have a guaranteed interest period of max. 10 years. If you have not fully repaid at the end of the 10 years, it can happen that you need follow-up financing and then the interest rate will be the normal bank rate. So the interest rate risk is relatively high.

With the current interest rates, it definitely makes sense to choose a long term (20 - 30 years) with options for special repayments and the possibility to adjust the repayment rate multiple times. The interest rate is then guaranteed over the entire term.

Of course, you pay less interest for a shorter fixed interest period, but with an interest rate of 3.6 %, you are definitely better off over the length of the term than if you pay an interest rate of 2.7 % but then start worrying after 10 years about renegotiating with the bank.

We went to our house bank, an online bank, and an "independent" financial advisor who turned out to be a complete fool. One inquiry, a self-disclosure from us, and at the first (!) appointment he already had all the documents ready for signing.

The online bank had no offer with 15 years fixed interest.

At our house bank, we spent countless appointments until the financing was optimized. We really liked that!

I think it’s also a bit about gut feeling. You should get a good offer tailored to your needs.

So, I was offline for two days, and if at all, stressed at work, but now I have caught up on the reading.

The disadvantage of the loans is that they only have a guaranteed interest term of max. 10 years. If you haven't fully repaid by the end of the 10 years, it can happen that you need follow-up financing and the interest rate will then be at normal bank rates. So the interest rate risk is relatively high.

In this case, it doesn't seem unfavorable, as apparently a residential property (inherited?) is available, which could possibly be sold (e.g., to repay the KfW loans). For loans, this rented property also counts, making you creditworthy through the rental income. Here you can clearly see the case-by-case basis. It looks similar for us (if you don’t count the kids ;)): We are already in the middle of life and should actually (if going by the "normal" calculation) have repaid the loan by the mid-60s or arrange the loan period so that everything is paid off by then. But that would be in 10 years for my husband. With a total net income of 4000, that could be managed (total loan amount about 200,000), but I don’t want that. I want it relaxed, who knows what else might happen to us ;) So we have a very relaxed 10-year loan, which can be partially repaid with the husband’s pension start ;) from an additional pension that can be paid out. (Of course, repayments are also made in between.) I can then handle the rest alone as the sole earner; the state pension will be lived off :D

So, if you can open a source of money in about 10 years, then a loan with a term of 10 years is not bad at all... at least you can benefit from low interest rates.

Warning about KfW property: I regret it! Commitment interest must be paid after about 4 months, and it hardly brings any interest savings!

The house will be inherited when my parents pass away, which nobody can say for sure, but it will then be available for buyout at 1/3 of the sale price.

Today I googled used properties again, or rather scouted... unbelievable what prices people ask for, under 380,000 you can't get anything decent of about 160 sqm that isn't older than 20 years, or the location is catastrophic....

that motivates me once again to build myself...

The house will be inherited when my parents pass away, when that will be is, as is well known, impossible to say, but it will then be available for buyout at 1/3 of the selling price.

Then I retract my previous comment. You don’t calculate with speculative death or inheritance!