Construction financing over 700k - Is the offer okay?

Dear builders,

Today we received a first offer for financing.
Briefly the main data:

Total loan amount: 700,000
Equity: 55,000*

*Equity chosen this way because 10% of the non-KfW portion (KfW loan now strangely no longer a component).

We are both lifelong tenured teachers, currently one child and wife on parental leave.
Full-time we both earn 3,700 euros net, with an upward trend due to experience levels.

The offer from VR-Bank is as follows:

Component 1:
325,000
Effective 1.17
Monthly rate 853.13
10 years fixed interest

Component 2:
320,000
Effective 1.50
Monthly rate: 928.00
20 years fixed interest

New KfW subsidy 55 is chosen as a grant variant.

How do you assess the offer?
The advisor also had an alternative offer with greater interest rate security after 10 years, but that is somewhat more complicated.
She probably wants to push a home savings contract on us in the next meeting.
Allegedly no larger amount can be financed over 20 years due to the lending value – trick or realistic?

Thanks for your assessments!

Allegedly, no larger amount can be financed over 20 years due to the lending value – trick or realistic?

Realistic and plausible (for me as an insider at Volks- und Raiffeisenbanken). Price is also okay.

Thank you for the feedback – so you would have to “buy” a larger portion of longer fixed interest rates with more equity, right? Increasing to 70,000 and thus 10% probably wouldn’t make much of a difference?

You would have to "buy" a larger portion with a longer fixed interest period with more equity

No. You will not get a larger portion with a longer fixed interest period from the bank. It is not possible otherwise due to refinancing reasons. If you were to use more equity, it would come at the expense of the short fixed interest period. The bank cannot do it any other way. I am not allowed to explain this in detail here.

Ok, thank you very much for your quick assessment. Then we will probably have to look for alternatives that better meet our needs. Next week, Dr. Klein will get in touch...

Repayment at 2% is too low. Theoretical term 40 years! Age 32? Whether equity is 55 or 70 k is irrelevant. Whether the AG is suitable must be assessed by current financiers.