Combination of Bank & KFW Loan for Home Purchase and Renovation

2023-02-05 00:38:21

They always say it so easily. Back "then" when you could finance with 2% or less interest and 2% repayment, 1% more would have made a huge difference.

And when the subsidy was finally discontinued, where they gave good money for unnecessary granny flats, you had to completely redesign your project. If you had already completed part of the financing and this financial component is missing... yikes.

2023-02-10 10:51:29

I admit that there is some frustration mixed into my post as well. A variable financing is honestly too risky for me in the current times. Of course, there is always the risk of an interest rate increase, but the current volatility is really extraordinary.

Because we have to start/mostly complete the renovation before the house is even habitable. That means we would have to take out another loan (renovation) about 3-6 months after the first loan (house purchase). In your case, you can use the special termination right after 10 years to replace the loan with a new one – and take out new capital in the process. So, for you, there is actually no problem that you have to take out a subordinated loan.

Thanks Alibert also for your contribution! I can very well understand your frustration...

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Has anyone else in this forum already had experience dividing the loans for house & renovation (interval of max. 1-2 years)? Possibly even with the KFW261 loan? I have now heard from our architect that banks might also accept going into the 2nd rank for the KFW loan – has anyone had experience with this? I can hardly imagine that with the low margin for the bank... but of course feel free to prove me wrong :)

Is the split worthwhile for you or is it more sensible to increase the existing loans when the time comes? Alternatively, one could certainly try to refinance and take out a larger sum beforehand if the need can be planned in the foreseeable future. That’s how I have solved it at the moment.

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Combination of Bank & KFW Loan for Home Purchase and Renovation

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