Financial planning for repurposing

to1: Installment €210.84 (1.35%, 2 years interest-only, term 25 years)

After 10 years, €35,000 must be refinanced. Don’t forget.

Component 2: Here the loan is replaced after 15 years by an annuity loan. Remaining debt approx. 50k, which is then paid off.

What is the interest/principal in the building savings loan (nominal and effective)?

Component 3: Bank loan 50k (variable)

to3: Installment €122.92 (for 50k, 1.95%, interest-only 10 years)

Variable, and still 10 years interest-only? Do you have the possible non-utilization in writing? And how long is the period without commitment fees?

At least with the values 1.95 and 122.92, and assuming you would take the 50,000, you would still have €44,483 outstanding after 10 years (since the banker only assumed 1% repayment).

But now comes the "small" catch.
After 10 years you therefore have to refinance €80,000. In fact, nothing has really been paid off yet (since the annuity loan has not repaid a single euro yet; the accumulated capital of the building savings contract is not taken into account; that runs for 15 years).

So, the loan-to-value ratio has not really improved yet; thus the conditions today won’t get any better; at best worse, because you really cannot hope that we will have the same interest rate level in 10 years.

You once wrote:

We would then have room for an installment of about €600

You are already €185 over the offer; and honestly, you would still have to put aside about €260 additionally (or pay it into a building savings contract) to "cover" the additional interest burden for the €80,000 in 10 years.

Thank you for the quick and critical response.

1. Why does the KFW loan require an additional financing of 35k after 10 years?
2. Effective: 2.97% with the building savings contract
3. The interest-free period is 24 months and the possible non-withdrawal still needs to be confirmed in writing, but it was verbally assured to us.

We are fully aware that we are already 185€ above our expectations. We also view that very critically. In the best case, we don't have to touch the 50k at all (which of course we cannot and do not want to assume).

1. Why does the KfW loan require refinancing of 35k after 10 years?

Quite simple. You have a calculated term of 25 years. The interest rate is fixed but only for 10 years. Until then, with your interest and repayment rate, you have only paid off 15.5k€. In other words, after 10 years, KfW makes you a prolongation offer. The KfW loans are "subsidized." That means, at the same interest rate level as today, this offer will be somewhat higher than 1.35%. But if the general interest rate level rises, the KfW follow-up rate will be adjusted to the market level as well.
Of course, you can also finance these 35k elsewhere. But the interest rates will be market level.

And in the worst case, you have 80,000€ (the 45,000€ remaining out of the 50k variable) that you have to refinance.

You are already above your desired rate today. That should be carefully considered.
Normally, at the time of refinancing, you have already paid off a portion. Unfortunately, due to the term of the TA of more than 15 years in your case, only 20,000€ has been paid down at the time of the prolongation of the debt mountain.

Effective: 2.97% with the building savings contract

That is acceptable. Some other building savings banks can be cheaper; but there are also ones that have more than 3.x%.

Yes, well, we have to renegotiate the interest rate after the fixed-interest period, that was already clear to us. But thanks for the hint. The alternative would only be another loan (higher interest rate) or a longer fixed-interest period (also a higher interest rate). Or are there other alternatives? Higher repayment means higher installment.

As I said, we still have an appointment next week for a comparison offer. Honestly, I am skeptical about the TA loan.

Do you have any recommendations on how we can improve the whole thing?

The TA component is the least critical part of your project.

Security 1: €12,000 (old building savings contract with 4% interest, should of course not be terminated if possible) Security 2: €10,000 (Riester savings contract, should of course also not be terminated if possible, but would be available for an absolute emergency)

Will you actually continue to contribute to these securities? In addition to the €600?

Probably because of the long fixed interest period, right?

So we definitely wanted to continue saving into the building savings contract with 4% interest. It's a maximum of 60€/month.

The Riester contract (currently also 60€/month) can continue to be saved into, but it doesn't have to.

Ultimately, both represent a kind of buffer. Both are included in our household budget. These would both be things that are not essential for survival.