Comparison of building financing models

Hello everyone,

I have three home financing offers and I am having difficulty comparing them.
Amount to be financed: 370K
First, I want to find out the right model for my financing, only then can I obtain three comparable offers.

Offer 1
KFW 153: 50K
KFW 124: 50K
Annuity loan 10 years: 120K
Annuity loan 15 years: 150K

Offer 2
KfW 153: 50K
kfW 124: 50K
Annuity loan 15 years: 270K

Offer 3
KfW 153: 50K
Annuity loan 10 years: 200K
Annuity loan 15 years: 120K (the loan is not paid off for 15 years)
Building savings contract (ready for allocation in 15 years): 120K

All three banks have promised to also provide an offer for the other models, respectively.
However, I do not know which financing model is the best?
Can someone support me? Do you need any further information?

Thanks and regards
Herbert

Do you still have the interest rates or other conditions for it? Planned repayment, possibly special repayment, etc. Otherwise, no one will be able to answer you. I personally find the building savings model mostly quite unfavorable. But you can secure the interest rates for a longer period. However, some other banks now also offer 20 or 25 years of interest rate security.

The banks I inquired with do not offer more than 15 years of fixed interest.
I can also provide the interest rates:

Offer 1
Kfw 153: 50K 1.81%
KfW 124: 50K 2.63%
Annuity loan 10 years: 120K 2.70%
Annuity loan 15 years: 150K 3.07%

Offer 2
Kfw 153: 50K 1.81%
KfW 124: 50K 2.63%
Annuity loan 15 years: 270K 3.03%

Offer 3
KfW 153: 50K 1.81%
Annuity loan 10 years: 200K 2.18%
Annuity loan 15 years: 120K (the loan is not amortized for 15 years) 3.22%
Building society savings contract (allocated in 15 years): 120K (0.5% credit interest, then 2.8%)

Hello Herbert,

without being able to judge which model is ultimately best for you, here are a few recommendations that we have considered / thought about.

Building savings contract / Wohnriester
In my opinion, it only makes sense if it is ready for allocation. The reason is, if you use it immediately, you pay the savings deposit plus interest of x%. You can save the interest and instead include the amount in a regular annuity loan. If a building savings contract / Wohnriester is in place, I would at least wait until it is ready for allocation and thereby possibly repay part of the loan amount later.

Annuity loan
The advantage for me here is that a fixed amount x is to be paid every month over a period y, and this is calculable. Also, pay attention that the repayment rate is at least 2% at the current interest rates and that it can be adjusted free of charge. Also, a long fixed interest period of about 20 years.

KfW
It depends here on the interest rate whether I would choose it. Also, there is a minimum of 1 year repayment-free period here. Whether that is an advantage or disadvantage :confused:

Otherwise, I would always look to make sure it is affordable for me in the long term and largely flexible (repayment adjustment / special repayments). This also includes family planning / new purchases etc. --> for that, there must still be a few euros left ;-)

Basically, I can only recommend that you contact an independent financial advisor from your area and tell him your wishes / requirements. From the large selection they have available, there will certainly be an offer tailored to your needs.
Remember, you have to live with long-term financial constraints :rolleyes:, so make the best of it ;-)

Best regards
Allegria

Since you still can’t say anything precise without the planned repayment/special repayment/free funds/planned repayment rate per month, perhaps a few general additions to Allegria’s presentations:

Option 1 is, in my opinion, only advantageous with a very high repayment rate: KFW loans usually have a 10-year fixed interest rate. If interest rates rise, there might be a shock after 10 years, because the interest on the remaining amount from the 220,000€ (KFW + 10-year annuity loan) will probably increase. If you have mostly repaid the 120,000€ loan during that time, then it might work out again.

Option 2: Without knowing the exact details, probably the most suitable all-rounder for many homebuilders.

Option 3: Allegria has already said quite a bit about the building savings contracts here. You first pay 1% costs on the building savings amount, have worse conditions for the annuity loan in the first 15 years than in Option 2, repay nothing from it, and only receive an interest on the credit balance of 0.5%. The building saver therefore costs you by far the most in the first 15 years. The advantage then lies in the loan period of the building saver with the 2.8% interest rate. Whether and when this pays off, no one can tell you, since we do not know the future interest rate development. I think that if you go to an independent financial advisor, you can also get 20 or 25 years of fixed interest. Then you have the long-term interest rate security of the building saver, combined with lower costs in the initial phase.

You should also consider when you will probably have the most money available in your life. For us, money will probably be tight at the beginning (parental leave, the time afterwards working reduced hours). During that time, I would not want to additionally save expensively with a building saver. If salary increases perhaps come regularly, then I don’t need the cheap interest rates in 15-30 years. By then, I want to have repaid as much as possible.

Personally, I had rather considered whether the KFW loan could be replaced by a building saver after 10 years and choosing a long-term fixed interest rate for the remaining loan.

In my eyes, all models carry an enormous risk, which the fixed interest rates are the "synonym for buttocks." Sure, the low interest rates and 370,000 are tempting. No matter which model you choose, you will always have to tremble in 10 years. The KFW loans will still have a respectable remaining debt value, and offers 1 and 3 are seriously dangerous. No one can say where interest rates will go. If they are like 10 years ago at 7-9%, and you don’t earn at least 4000 net, you can say bye bye to the house. You will likely have to repay 75% of the remaining debt. It’s also super unrealistic to start off the first two years fully with special repayments. The garden has to be done, the driveway, new furniture, etc., and in 10 years, if things go really badly, the first new heating system might be due.

I would advise you to find a reasonable private financial advisor, have your finances completely checked, and try to get better offers through a loan broker. We always received poor offers from the banks, and only with the loan broker did we get an offer that lets us sleep peacefully. KfW 50,000 and 200,000 fixed for 20 years, at about 3% on average. But we have a high equity share.
But you should definitely insist on the 20 years. And KFW sounds good at first, but it can end quite badly if you need it too much.

Wohnriester... well, read about it yourself online. I say stay away.

Yeah yeah, just my humble layman’s opinion.