Cancel the loan and accept a better offer?

Thanks for the answers. Well, the bank requires a minimum repayment rate of 3.5% for a term of 20 years - that's why we couldn't lower it. For me, €90k always seems like a very high remaining debt... if the interest rate suddenly rises to 6%, then the installment shoots through the roof... or the remaining term extends significantly. That's why the consideration was

If the interest rate rises to 6%, you will have an interest burden of €450 - in addition, there is the repayment amount you desire. All super easy ;)

Am I correct in assuming that the loan amount is around €470K?

If the interest rate rises from 1.89% to 6% after 20 years, you will pay the installment of €2050 for about 5 months longer at the same rate. So instead of 23.5 years, it would be 24 years. With option 2, you pay 25 years with the same burden (installment of €1790 + €260 special repayment).
To achieve this, the interest rate in option 1 would have to rise to 14% after 20 years.

With the same monthly burden, option 1 is by far better. If special repayments come into play, the result improves even more in favor of option 1.

PS: I see special repayments as a marketing gimmick a bit differently. It’s just not for everyone.

Why 650€? I don't quite understand that... over how many years?! I think it will go like this: the monthly installment (let's just say 2000€) will then be charged interest at 6% instead of 1.89%. Accordingly, we should be well above the current installment then. Or am I making a serious mistake?! :)

Hello,

I am new here and have been reading along for a long time. Now I have a question of my own :)

We have the following situation:

-> Loan with a 20-year term at 1.89% effective interest rate, monthly payment (including KFW = approx. €2200)
The payment seems high to us, but manageable with our salaries (approx. €6500 total income, both same salary, not married, no children yet)
3.5% repayment (freely adjustable repayment rate anytime for free from 3.5-5.5%) + 5% special repayment per year.

Without special repayments, there would be approx. €90,000 outstanding after 20 years. Calculated term approx. 23 years.

Now, unfortunately, the interest rates have fallen significantly since the contract was signed and we obtained a 30-year offer from Interhyp:

30 years fixed, 2.43% effective, 2.24% repayment (adjustable twice during the term, but not below 2.24%), monthly rate including KFW = approx. €1950 - no residual debt after 30 years, 5% special repayment possible per year.

What we like about the offer: long interest rate security, approx. €250-300 more available monthly, and security regarding the residual debt. What is, of course, less great are the loan costs: the credit costs (interest expenses increase by €80,000) if we would use the full 30 years. But the plan is to be done after a maximum of 25 years.

So you could say you can put the monthly "savings" aside and at the end of the year either go on vacation or buy something else or put it into the special repayment.

Now the only question is whether all the hassle (revoking the loan, transferring the land charge -> costs even covered by Interhyp!) is worth it.

With the lower rate we would simply feel more comfortable... without KFW the rate would then be €1790 versus €2050 with the other loan. Sure, not the world, but if it ever gets tight and there is only one salary, you would have €260 more available. And we have security regarding the interest rate and don’t have to refinance possibly €90,000 after 20 years.

I don’t know... maybe we are overthinking it... I wonder if others feel the same...
We just want to still be able to live and not hand every euro to the bank every month.

What do you think? What would you do?!?!