Building mid-2016 - secure low interest rates now or KFW?

- we will clarify the start of construction. Currently, we are still looking for a contractor, but we have a favorite with whom a meeting will take place next week. I also want to talk to the bank again; possibly it would be possible to already use the first part of the loan to finance the plot of land (€60,000).

Hello ROLi84,

as long as your final construction costs are not yet determined, I would definitely advise against financing the plot of land, unless the bank offers you a variable financing (redeemable at any time) on good terms. If you finance the plot of land long-term beforehand, you are usually tied to this bank with the entire financing because they then hold the first priority in the land register!!!

Your offer of a 20-year fixed interest rate is really excellent. However, you should definitely check whether this bank (probably more likely an insurance company) also grants you sufficient payment installments. There are insurers on the market who only pay out in 4-6 installments according to construction progress, and that could be too little in your case.

If this provider definitely does not offer KfW, there is still an option with a subordinated KfW loan (without interest rate surcharge) up to a maximum 70% loan-to-value.

Best regards, Andreas

With an equity share of about 55 percent, better conditions should actually be possible. But of course, the income situation and other securities are also relevant. A friend received an offer from his bank of less than 0.8 percent (!) for 5 years! However, he also expects payouts from life insurance policies etc. in the next 5 years, with which he can fully repay the loan.

The KfW only promotes buildings with KFW 55 or better from 2016 onwards. However, then there is the double amount, that is 100,000 euros per residential unit. By the way, you can find out the conditions of the KfW at kfw.de

44,000 € special repayments per year are each over 20 percent of the loan amount! Can you do that? If yes, then significantly better conditions are possible, in my opinion.

So far, it is certain that there is a €5000 repayment grant. (5% of 100,000) To be read on the KFW page.....

I have meanwhile purchased the property (without a bank). At the moment, an architect is working on a preliminary design plan - with that, we will then go to the contractor (already selected based on the best references among colleagues and an offer for a model house that roughly meets our requirements).

The interest rates for 10 years are currently well below 1.5% - I hope that this will remain the case for the next 2-3 months as well. By then, everything should be ready to specifically pursue the financing. I have initially discarded financing over 20 years; for 10 years, I currently have an offer of 1.17% effective - this would probably be cheaper for me.