Could this invoice be correct???

Hello everyone,

I am not fundamentally sure if I am in the right place with my concern, but I’ll just give it a try. Otherwise, I ask a moderator to move this to the appropriate place.

Yesterday, on Sunday, we had a consultation, more or less for fun, with a representative at a local prefabricated house exhibition. We just wanted to talk about what we imagine and what he can offer us. The whole thing is relatively rough, but I would still be interested to know if you consider it realistic. The estimate is for a semi-detached house with a garage, 130m² living space PLUS basement in the "technikfertig" version. Technikfertig means in this case that floors (except tiles in the bathroom), painting, interior doors, and installation of sanitary fixtures are to be done by ourselves.

The calculation showed a total of €290,000 in the end, including the plot of land. €15,000 of equity was included, so €275,000 would need to be financed.

The nice gentleman then divided that into a €50,000 KfW loan at 2.05%, another €100,000 KfW loan at 2.9%, and €125,000 at 3.2% through the "normal" bank. An interest rate lock-in of 10 years was included. Both KfW loans would apparently be repayment-free for the first 5 years (whatever exactly that means...???), if I understood correctly, and the rest via the normal bank was calculated with a 1.2% repayment rate.

In short, the gentleman ultimately came up with a monthly burden of €795 minus a Riester subsidy of €45, which would, in the end, make €750 per month.

Is this calculation realistic? I tried to recalculate it but failed. Maybe one of you can do it, but it seems incredibly low to me.

Oh yes, as a final point, a total duration of 30 years was planned.

Have a nice evening and thanks in advance for any constructive help!!!

The nice gentleman then divided it into a €50,000 KfW loan at 2.05%, another €100,000 KfW loan at 2.9%, and €125,000 at 3.2% through the "normal" bank. A fixed interest rate period of 10 years was factored in. Both KfW loans would probably be repayment-free for the first 5 years (whatever that exactly means...???), if I understood correctly, and the rest through the normal bank was calculated with a 1.2% repayment rate.

In short, the gentleman finally came to a monthly burden of €795 minus a Riester subsidy of €45, which at the bottom line would make €750 per month.

Is this calculation realistic? I tried to recalculate it but failed. Maybe one of you can, but it seems incredibly low to me.

It seems so low to you because you hardly have any repayment and very cheap interest rates, bought at the price of a short fixed interest period...

The problem with this calculation is that after the 10-year fixed interest period you have hardly paid anything off (for example, you paid the bank about €54,000 in these 10 years, of which only €17,000 was repayment... the rest was interest... which means you still owe about €108,000 to the bank) and you have to negotiate a new loan agreement with your bank! In 10 years it is quite possible that the interest rate will be double what it is today... we are in an extreme low-interest phase! Interest rates of 6-7% and up were not uncommon...

Instead of €750, you will suddenly have to pay €1,200-1,300 per month... not because you repay more but simply because you have to pay more interest!

By the way, with a 1.2% repayment rate, you will not be finished in 30 years but in 40!

Basically, you should have your interest rate fixed for a longer term nowadays... 15 years is in my opinion the minimum! After 10 years you will have a special termination right anyway... Furthermore, I would not repay with only 1.2%... more towards 2% upwards... of course, you can also do that via special repayments... I only mean that you should have the money available to repay 2%!

And "€15,000 equity" means: forget it!

With a family net income of €4,500, that is definitely doable... If you and your wife each earn €1,500 and you plan to have children then rather not
without knowing your financial situation, in my opinion, no reasonable statement can be made about that!

Do I understand your sentence "minus a Riester subsidy of 45€" to mean that Wohnriester was also included in that calculation?

It will also be credited or taxed for you later on in retirement.

Maybe as a quick comparison. We have just done our financing.
Our rate is higher, the total costs are lower, we are contributing more equity.
We planned about 25 years to pay off without Riester subsidy.

Hello everyone,

first of all, thanks for the answers and sorry to Wadi if I briefly skip your post now.

It is correct that I have no idea, but that’s why I’m asking here so dumbly and don’t let myself be talked into anything. Nevertheless, your explanations confirm my uneasy feeling.

But it’s good to know at least what one should possibly pay attention to. As I said, it wasn’t an urgent situation where we wanted to build at all costs. It was simply about listening, you could say.

I find it cheeky that the nice gentleman predicted a term of 30 years for us. And honestly, this wasn’t some backstreet company, but one about which I have read a lot of positive things here and in other forums, especially regarding the financial arrangement.

Well, I’m honest here. I’ll confront the person with my newly gained impressions and see what he thinks of it. ^^

Edit: And now briefly to Wadi... Yes, Riester was still included.

I find it cheeky that the nice gentleman predicted a term of 30 years for us.

Now it depends on the exact wording ^^

Just because the bank contract has a 1.2% repayment rate doesn't mean you can't pay off faster/more...

Some KFW loans run, for example, 20 years, some 30, etc... maybe he planned to use the money that had gone into a KFW loan after 20 years additionally to repay the bank loan, so that you would be finished after 30 years.
Or simply to pay more off over time thanks to increased income...

Or a residual debt is planned...

I have a 30-year fixed interest rate and pay 0.5% more interest for it. There's always a bit of poker involved, but I "only" lose 12,000 EUR if the interest rate doesn't rise over the next ten years.