Building financing done right or wrong??

Hello,

I built a house in 2008 (value approx. €230,000 including land).
In doing so, my girlfriend and I contributed about €30,000 in equity / sweat equity.

After a long back and forth, we decided against a normal construction loan at the time. We listened to several banks and also various financial intermediaries and advisors.
What convinced us was an asset management company nearby.
We simply trusted their advice, the people (3-person company and very family-like), and that they acted in our interest. They also managed, through a review of our insurances, that with the house and all insurances we now pay about the same as we did before for the two of us in the apartment. That built trust.

We took the needed amount as a loan (approx. 4.5% interest) and pay monthly interest for it. (Interest fixed for 10 years through DSL Bank).
As a repayment type, we chose a pension fund via the Swiss Helvetia. (the product is called "Helvetia Clevesto Allcase")

And this is exactly where I have a bad feeling. My advisor can talk as much as he wants, but when everyone else is doing something different and everyone only talks against this type of financing (quote: "this is gambling") I don't feel comfortable with it.
Although I have learned in my life to never listen to the masses, but always form my own opinion (even if it involves a lot of effort). So far that has worked very well for me.

Although the facts speak for Helvetia. For example, pension funds are very stable and hardly affected by market fluctuations and are considered a safe investment. Also, even with a pessimistic scenario, you repay faster than with normal loans.
There were many other reasons I no longer fully remember.

Now my question to you is whether this is really good in the current global situation with the euro and financial crises, or if I should rather switch the model.
If yes, how do I get from the current model to the classic financing?

Is there anyone who financed in the same way as I did and would like to share their experience?

Thank you.

Hello,

personally, I would not choose such a form of repayment, as it actually has a bit to do with gambling. Furthermore, you are repaying in a lump sum, and it is unlikely that the returns from the bond fund will be higher than your interest payment. That may be the case, but it does not have to be.

Therefore, I would have opted for a normal financing.

It's like always when it comes to finances. Whether you did it right or wrong will be revealed by time. Personally, I prefer a clear, direct financing. Only unemployment can cause me problems. And that would also affect me as a tenant - also a strong deflation.

Edit: You can renegotiate/terminate the loan after 10 years of duration. I don't know how it looks with the fund. Whether you can change something beforehand (-> annuity loan) you have to discuss with your bank.

Pension funds are not cheap and if not speculative also not profitable. A nice commission is collected and you pay a lot of interest. Whether Undine earns more through the pension funds? Never

Hi!

I don't want to comment on right or wrong - the final settlement is always at the end!

At least the instrument is risk-taking. After the fixed interest period ended, 0% was repaid, the interest rate is not really low, and the return is uncertain.

In addition, this is not a bond fund, but a fund of funds. According to its own advertising, it invests in 28 different - especially equity - funds with 5 different investment strategies; so it also depends on what was determined at the time.

Best regards,
Tomtom.

Hello, whether the suspension of repayment pays off will be seen at the end of the term. The prerequisite is that the return on Helvetia is higher than the loan interest (put very simply). If the return - after costs, taxes, etc. - is lower, it was a losing deal. For the intermediary, it was definitely worthwhile - they received a decent commission. The advisors were NOT advisors, but merely salespeople! Just for fun, ask about the current surrender value of Helvetia - it will be significantly lower than what has been paid in so far. Changing the ongoing loan agreement is not so easy. DSL will refuse. When the fixed interest period ends, the extension contract can be converted into an annuity loan with ongoing repayment. Until then, the only option - if financially possible - is to save additional money and make a special repayment at the end of the fixed interest period. Maybe special repayment is also possible during the term if it has been agreed with DSL (see loan agreement).