Extra repayment or saving with a home savings contract? Specific case:

Hello ,

I have been reading along for a while and now have a concrete question in the hope that you can help me...

The question in the headline is the "topic", the specific data of our ongoing construction financing are as follows:

Annuity loan:
370,000 euros loan amount
1.64% effective over 10 years, concluded on 01.10.2017
Repayment rate 2%
Installment 1,120 EUR/month

Since we wanted maximum planning security at the time and had to pay no closing fee, we simultaneously concluded a home savings contract for a home savings amount of 270,000 euros, which we have been regularly funding with 80 euros from the beginning. We also already knew back then that after about 5 years from conclusion a larger sum of around 50-60k euros would be coming in.
That day has now come a little earlier than expected and we are currently considering the initial question. It was originally always planned to deposit this money into the home savings contract and, after 10 years, with the entitled home saver, to redeem the loan (minimum home savings amount = 30% / repayment interest = 2.0%).

Now I am not so sure anymore. We can make special repayments of 18,500 euros p.a.—does it make sense to throw overboard the entire construct designed back then and use the money for special repayments? The forum here has unsettled me in this regard since it is everywhere said that interest rates will remain at this low level for years to come...

A loan calculator shows that the residual debt in 2027 would decrease from about 289k to about 228k if I made 3 special repayments of 18,500 euros each. However, there would then only be about 10k in the home savings contract due to the preliminary funding... does it make sense to split it at 33k and take the risk with about 195k?

Have I overlooked something, or made a thinking error? I am currently stuck and would appreciate tips!
Many thanks

Have you clarified whether you can even contribute this amount as a special payment into the [Bausparvertrag]? With well-interest-bearing [BSVen], the building society will probably not agree to this, unless it is not regulated accordingly in the tariff conditions or there is no regulation that allows the building society to cap the max. annual payment.

Yes, deposits are possible at any time in unlimited amounts. The interest during the accumulation phase is only 0.1%, repayment as stated 2.0%.

Just make your €18.5K special repayment. That will save you real money, here and now. The earlier the special repayment is made, the more you save over the loan term. Put the rest into 1-year fixed deposit and reassess it in a year.

In 2.5 years you will already be in the range of a possible forward loan. This in turn creates interest rate security and you can decide on the fate of the building savings contract at any time.
For example, a 10-year fixed interest rate via forward for 60 months currently costs 1.0% at 60% loan-to-value. A lot would have to happen for the building savings contract to be worthwhile.

Interest rate risk ... Well, €228K with 2% repayment and 2% interest costs €760. At 3% interest, €950. At 4% interest, €1140.
You will be able to afford the rate, even if interest rates are higher. Of course, the debt repayment will take longer. But "losing the house" is highly unlikely. Even without any hedging.

Thank you for your feedback, that encourages me. The fact that no other expert has contradicted this so far additionally shows that...

Would you please explain this to me briefly:

In 2.5 years you are already in the area of a possible forward loan. This in turn creates interest rate security and you can decide about the fate of the building society contract at any time.

I can already conclude a forward loan in 2.5 years? One would assume that the interest rates will be at a similar level by then...?! Then you wouldn't really need the building society contract anymore, or what do you mean by "decide about the fate"?
In other words, every forward < 2.0% improves the starting position for the year 2027, right?
Are there any disadvantages to this?

Are my assumptions in the last post correct or is there still a "but" or exceptions? Would be great if someone could give me final feedback here, thanks