We also had some conversations with a Wüstenrot representative, whom I would recommend at any time. They have some very interesting building savings contracts on offer that I hadn't seen/received from the competition. However, this only worked with a certain down payment (I’m not sure anymore if it was 10% or 20%). The downside was the quite high rate and little flexibility. I really thought about whether we should do it, but in the end it was too risky for me since we don't have children yet and can't estimate the burden afterwards.
Basically: A building savings contract always has a certain amount until it is eligible for allocation. Only when this amount is reached do you get the loan. Until then, you need a loan if you want to buy/build beforehand. This is a so-called repayment suspension, where you pay the interest until the building savings contract is allocated. Afterwards, it is replaced by the building loan. The effective interest rate for the building savings contract is therefore significantly higher than for an annuity loan, because until allocation you do not repay a single cent, so the interest does not decrease. For example, if you first have to save 40% and conclude the repayment suspension at 2.5%, then the 1.25% loan interest of the building savings contract is of no benefit to you, since you initially pay quite a lot of interest on the full amount for about 15 years.
At €100,000 and let’s say 2.5% over 15 years, that is €2,500 interest per year (€200 monthly). To reach, for example, 40% after the 15 years – all fictitious values, since you don’t have the exact data – you have to save €222 monthly. At 30% it’s still €166. The Riester subsidy lowers that a bit (I don’t have the exact amount in mind, but it is something between €100 and €200 per year without children), but it’s not a game changer. The loan amount can of course be scaled arbitrarily; this was the easiest way to calculate.
On the remaining amount, you then pay the 1.25%. This can definitely be worthwhile, but only if you reach allocation in time; otherwise, it becomes expensive.
Therefore: find out what the minimum deposit, the allocation rate, and the interest on the repayment suspension are. Annual processing fees are also not insignificant, as they sometimes like to charge the wallet in Wohnriester.