Construction financing - Influence of private retirement provision on interest rate

Please refrain from philosophizing about my income situation and saving habits

Then enlighten us! T€ 550 financing, no additional equity, pregnant wife, no retirement provisions so far ... These are usually the financings that indicate young people who later rely on financial crutches and will probably lose their house at some point (sale or foreclosure) ==> experience from my professional past Therefore, don't take it personally, but maybe learn from the inquiries or speculations.

When you pledge balances, no matter where they are invested, whether in insurance policies or (building) savings contracts, in a real estate financing, the interest rate decreases. Especially when it is a 100% financing that you do for rental apartments for the tax office. However, in 1-2 years you will not accumulate any balance in this expensive pension insurance but will have a surrender value of 0. Moreover, you confuse the terms pension insurance, unit-linked, active and passive fund, and everything else there is. And what does the F in ETF stand for?

About 12 years ago, assignment of life insurance and suspension of repayment were very popular, especially among investors. On the one hand, you could fully deduct the interest & the life insurances were not taxed.

Then lower and lower forecasts were issued and the banks started to offer that you could repay.

Currently, the market situation is absolutely not suitable for making life insurances. It is a losing business.

He recommended the product "Generation private plus" from Canada Life to me. This is a unit-linked pension insurance - the costs are accordingly high. €4,500 in initial and distribution fees, monthly administration fees of €5.43, and fixed costs of €274 in the first 10 years.

I searched for this product just for fun. If I interpret financial forum discussions correctly, your list is missing additional costs, such as a percentage fee for fund management, which is often around 1.5% p.a. (!!). If you cancel, there are hefty penalties, so you get far less back than you paid in. I find the product very unappealing, especially very expensive. And anyway, why a product from Canada?? Maybe I'm wrong, but then you should be able to clarify it for me. If not, the rule is: do not enter into any contract that you do not understand 100%.

Honestly, don't sign that, and maybe even change your advisor. At least get advice from other financial brokers.

See it like the others: This has no impact on the interest rate. If it does, the financer is not the right or cheapest one.

Besides, I always find these tied deals rubbish. This linkage of real estate financing and AV and guarantee plus maybe even with BU within the product cannot result in a very good solution... Rarely does everything good come from a single source.

If you look at the funds you can choose from, you also see that these are not necessarily large, well-known funds or fund companies. For us, there are unknown names involved...

In summary: Hands off. Keep It Simple and Stupid (KISS).

Then enlighten us! €550k financing, no additional equity, pregnant wife, no retirement provision so far ... These are usually the financings that indicate young people who will later be financially crippled and in case of doubt will eventually lose their house (sale or foreclosure) ==> experience from my professional past So don't take it personally, but maybe learn from the inquiries or speculations.

So here is a brief insight: - Net income together about €6,500 - Girlfriend is a civil servant, I am an employee (permanent contract) - Equity is sufficient to cover the ancillary purchase costs.

We have detailed all our expenses. We have set a maximum loan repayment of €1,600. In doing so, we have also taken into account parental leave and any reduced working hours of the wife. We are fully aware that you have to restrict yourself here and there, but we also accept that.

I once searched for this product for fun. If I interpret financial forum discussions correctly, your listing is missing additional costs, such as a percentage fee for fund management, which is often 1.5% p.a. (!!). If you cancel, there are hefty penalties, so you get much less back than you paid in. I find the product really unappealing, especially very expensive. And anyway, why a product from Canada?? Maybe I’m mistaken, but then you should be able to clarify it for me. If not, the rule applies: don’t sign any contract you don’t fully understand. Honestly, don’t sign it, and maybe even change your advisor. At least get advice from other financial brokers.

No, you’re not mistaken, my research came to exactly the same conclusion. That’s why I will definitely keep my hands off this. As described in the original post, I was offered a lower interest rate on the construction financing for it. But that just turned out to be a "clever" sales tactic.