Equity with loss or higher financing amount?

Hello everyone, I am facing the following decision.

A few years ago, I was persuaded to take out a Wohnriester building savings contract without understanding the background. I do not want the deferred taxation.

Now I have two options:

Option 1: I let the Wohnriester building savings contract be paid out (canceled) and have to repay the government subsidy as well as tax benefits. That would cost me about €1700 and free up €8000 in equity.

Option 2: I convert the Wohnriester building savings contract into a retirement product and let it mostly rest. Then the money will become a pension, which I must also tax, but more manageable than with the housing promotion account.

I am very undecided and would like to hear opinions.

For me, an important factor would be whether I urgently rely on the equity, e.g. because financing would otherwise not come about and/or the higher installment would be a problem without the equity. With 8 TEUR, I would assume that this is not the case. I would also remove the 8 TEUR from the contract if the alternative would be an (expensive) follow-up financing or if I still urgently needed a correspondingly high buffer. It would also be interesting to see whether 8 TEUR more equity achieves a cheaper loan, so that the financing conditions improve. The decision would then be even easier if it turns out that the improved conditions would compensate for the €1,700 loss.

The financing is arranged with and without this capital. Regarding the [Beleihung] it is a good point. I will have both scenarios calculated.

I do not want the subsequent taxation.

Consider how important this is to you. An end with horror is better than finding no end at all.

Another factor is whether you definitely want to do Riester. That means no Wohnriester, but instead finding and contributing to another Riester product? Is that the plan?

You would tend to terminate the contract ?

The plan is to have a cost-wise predictable future. The idea to convert it into another Riester product only came up to somehow save costs.

I just checked the exact amounts. I would have to pay back €144 for 2014 and €233 for 2015 in taxes. The credit amounts to €9629 minus €1368.10 allowance and the €377 taxes, which would leave me with €7884. Riester-free for free use.