Evaluation of our financing offer

Thank you again for all the feedback. Here is the update I have:

€80,000 annuity loan, 0.99% effective interest, monthly annuity €370, fixed interest for 20 years, interest payments over the period approx. €8,000, remaining debt €0

€120,000 KFW loan, 0.78% effective interest, monthly annuity €385, fixed interest for 10 years, interest payments over the period approx. €7,800, remaining debt €85,000 (here the €42,500 repayment subsidy is still deducted, leaving €42,500 remaining debt)

We just then have the risk that we will need to take out follow-up financing for €42,500 at the interest rates applicable in 10 years. What do you think about that? Manageable risk?

Others finance that for a car. I consider that very low risk.

I consider it very low-risk and manageable. Taking inflation into account, there is practically no remaining debt left =)

You simply have the problem in 10 years that no one is eager to finance the 42,000.--. The bank that holds the first position in the land register is not, and only a few banks accept the second position. If the interest rates remain that low, you can also cancel the large 80k loan after 10 years and combine both into a new loan. Or you don’t make special repayments in the first 10 years and save as much of the 42k€ as possible.

For the extension, you simply request 50,001€ from other banks if the offer from the existing bank is too bad. But at 42,500€, that’s peanuts anyway.

You just have the problem in 10 years that no one is eager to finance the 42,000.--. The bank that is first in the land register is not, and only a few banks will go for the second position as well.

That's the KfW loan. You can conclude it for 20 years, with a 10-year fixed interest period. Then only the interest rate risk remains for years 10-20, with a small amount. And presumably, the interest advantage with full repayment KfW / refinancing after 10 years is minimally higher.