Construction financing / fixed nominal interest rate / commitment interest

Hello everyone,

we are planning the following project.

Data House:

New construction of a solid semi-detached house, E70
Ground floor + upper floor + attic + basement
122m2 living space
5 rooms
WU concrete basement (insulated and with radiators)
Heating system heat pump and underfloor heating

Costs:

Construction costs house fixed price
240,000 EUR (turnkey)

Land costs including development, land purchase, notary:
170,000 EUR

Additional construction costs:
approx. 30,000 EUR

Garage: 8,500 EUR

Sample buffer: 5,000 EUR

Material for floor coverings, paint: 6,000 EUR

Outdoor facilities (approx. 16,500 EUR)

Total costs:
475,000 EUR
Equity capital:
60,000 EUR

Own contribution:
20,000 EUR

External capital:
396,000 EUR
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Based on the data, I had financing offers calculated by two different financial brokers, resulting in a monthly financial burden of approx. 1400 EUR .

Questions:

Could you evaluate these offers with your experience and knowledge?

What is good, what is bad about the individual components?

What could be done differently or better?

Where should something be changed?

Would you rather recommend a pure annuity loan? Without combination or Riester? How long should the fixed interest period be at least? And initial repayment?

Thank you very much!!!!

Best regards

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1st offer

a) Riester loan (husband): 136,000 EUR
Annual basic allowance husband (154 EUR) and 1 child (300 EUR) flow into the repayment here.

Disbursement: 100%
Nominal interest 3.44%
Effective 3.49%
Initial repayment 1%
Special repayment 5%
Fixed interest period 20 years
Installment 503.20 EUR
Provision interest 3% (p.a. from 3 months after commitment)
Costs appraisal none
Processing fees none
Residual debt approx. 84,919.71 EUR after fixed interest period
Calculated contract term 34 years 7 months (without special repayments)

b) KFW 124 (home ownership): 50,000 EUR

Disbursement: 100%
Nominal interest 2.60%
Effective 2.63%
Repayment rate 2.01% (p.a. plus saved interest)
Repayment start after 3 years
Fixed interest period 10 years
Installment 192.08 EUR
Provision interest 3% (p.a. from 4 months and 2 bank days after commitment)
Fees none
Residual debt approx. 42,293.58 EUR after fixed interest period (repayment-free period considered)
Calculated contract term 35 years (without special repayments)

c) KFW 153 (energy efficient building): 50,000 EUR

Disbursement: 100%
Nominal interest 1.45%
Effective 1.46%
Repayment rate 2.90% (p.a. plus saved interest)
Repayment start after 2 years
Fixed interest period 10 years
Installment 181.25 EUR
Provision interest 3% (p.a. from 12 months after commitment)
Fees none
Residual debt approx. 37,708.25 EUR after fixed interest period (repayment-free period considered)
Calculated contract term 30 years (without special repayments)

d) Annuity loan: 160,000 EUR

Disbursement: 100%
Nominal interest 2.78%
Effective 2.82%
Initial repayment 1%
Special repayment 5%
Fixed interest period 10 years
Installment 504.00 EUR
Provision interest 3% (p.a. from 6 months after commitment)
Costs appraisal none
Processing fees none
Disbursements 1
Residual debt approx. 141,579.21 EUR after fixed interest period
Calculated contract term 47 years 11 months (without special repayments)

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2nd offer

a) Combination loan: 336,000 EUR
Annuity loan and building savings contract

The idea here was to conclude a combination loan to secure interest rate stability. The current preliminary loan is 2.40% (10 years) and the building savings contract (15 years saving period) after allocation 2.75%.
The interest is paid off at the same level for 10 years and the building savings contract is saved for 15 years.
The 5 years have to be bridged (risk).
After 15 years, the building savings contract pays off the loan and the building savings sum reduces the loan amount accordingly; you receive the new loan at 2.75% and continue to pay off for 15 years. That means a total term calculated here is 30 years.

Disbursement: 100%
Nominal interest 2.40%
Effective 2.43%
Repayment substitute product: building savings contract (BHW Wohn Max 2.75%)
Installment repayment substitute product: 504.00 EUR
Interest installment: 672 EUR
Total installment: 1176 EUR
Closing costs: 3,360 EUR
Administration costs: 12.00 EUR per year
Optional special repayment right: 16,800 EUR
Fixed interest period 10 years
Provision interest 3% (p.a. from 6 months after commitment)
Costs appraisal none
Processing fees none
Disbursements 8
Residual debt 336,000 EUR after fixed interest period
Calculated contract term 20 years (without special repayments)

b) KFW 124 (home ownership): 50,000 EUR
not included, since interest on the above credit is lower than the subsidy interest.

c) KFW 153 (energy efficient building): 50,000 EUR

Disbursement: 100%
Nominal interest 1.60%
Effective 1.61%
Repayment rate 2.71% (p.a. plus saved interest)
Repayment start after 1 year
Fixed interest period 10 years
Installment 179.58 EUR
Provision interest 3% (p.a. from 12 months after commitment)
Fees none
Residual debt approx. 36,893.05 EUR after fixed interest period (repayment-free period considered)
Calculated contract term 30 years (without special repayments)

With variant 1, €220k remaining debt after 10 years fixed interest ... I wouldn’t voluntarily put myself through that.

I find variant 2 with the 5 years of "idle time" stupid ... . What is the remaining debt after the expiration of the fixed interest period of the building savings loan? Total term now 20 or 30 years?

Calculate the costs of both variants over the term and assess the risks after the expiration of the different fixed interest periods.

Why actually no annuity loan without [Bausparvertrag] or [Riester]?? Get an offer for that as well.

I have now done the calculation for variant 2

First 15 years

Bridge loan 15 years
Interest payment 672 EUR

Building savings contract 15 years savings phase 15 years
Payment 504 EUR

KFW loan 15 years
Payment 180 EUR

Corresponds in the first 15 years to a monthly burden of approx. 1356 EUR.
But only if the interest rate on the bridge loan remains the same in 10 years. If the interest rate has risen to e.g. 6%, then we would no longer pay 672 but 1680 EUR just for interest Oo That is a high risk I think, because the outstanding debt is so high in 10 years.
For me, that definitely means signing up for 15 years, right?

Second 15 years

Bridge loan
- will be paid off by building savings contract - interest payments here no longer apply

Building savings contract 15 years 246,000 (reduced by building savings amount) loan ready for allocation duration 15 years
Payment 1669 EUR

KFW loan 15 years
Payment 180 EUR

corresponds to 1849 EUR monthly for the remaining 15 years!!!!
That is probably the catch, right? The monthly burden increases significantly after 15 years because the BS loan must be repaid in 15 years.

One could at most try with special repayments already in the first 15 years to try to increase the building savings amount to reduce the loan, right?

But that is clearly the hidden catch?

Apparently yes. I also calculated with a total rate of €1,400 (including KfW, with a constant rate) for the second 15 years and come to a residual debt of almost €90,000.

After the first ten years, in addition to the interest rate risk with the bullet loan, there is also the residual debt to be financed of €36,000!

Can you really save for special repayments? The savings rate for that would be added to the €1,400.

Here in the forum, you often read about a €500 rate per €100,000 loan ... for you that would be almost a €2,000 monthly rate. Depending on the fixed interest period, there is still a high remaining sum ...

Hello, the amounts of the individual financing components may not be correct here: Variant 1 financed 396 TEUR Variant 2 financed 436 TEUR. Typographical error or actually like this?

In variant 2, 1x 50,000 € from the KFW is lost, then it is 386,000 € ... ok, 10,000 € are missing.