Financial service provider has made an offer

What will you do in 15 years when you have to renegotiate, but the interest rate has tripled? Will you still be able to afford the payment then?

He can, at least with 1% repayment.

15 (or rather 14) years fixed interest probably because the loan would be paid off with regular special repayments. I can’t quite understand why the objection "few people actually do that" always comes up. Are there empirical studies about that or do you rely on your prior knowledge?

The OP explicitly described their intention to make special repayments; the money for it seems to be available. It is up to them to carry it out now.

The interest rate seems pretty good, but in the end it depends on what you are offered. Have you also been to banks or other brokers?

If the topic of children is settled, I see no problems here. But remember that the cars might not be in good shape in 5-10 years and that reserves should be available otherwise as well.

No, not empirical - but I know enough people who have built...

And why doesn't one take a higher rate right away? Exactly, because it could get tight - once you have a house, a lot of money "just" goes out.

But it's not my business, I just come from the industry and know how many plan it and how few actually do it...

I’m not accusing anyone of anything, but one should plan realistically. I’m sure to make no special repayments in the first 3-4 years.

We are planning a low fixed rate and want to pay off a lot via special repayments. For our current expenses, we only need one income and can put my salary aside. We are thus able to make the 5% special repayment.

We have no children, no other financial obligations, and the cars are still in good shape.

What will you do in 15 years when you have to renegotiate but the interest rate has tripled? Will you still be able to manage the rate then?

That would be too much outstanding debt for me...

Never planned to have children? Special repayment is great – but few actually do it. Especially not in the first few years...

And why don’t you just pay a higher rate immediately? Exactly, because it could be tight – once you own a house, a lot of money just "goes away" like that.

But it's not my problem, I just come from the industry and know how many plan it and how few actually do it...

I’m not accusing anyone of anything, but one should plan realistically. I am sure in the first 3-4 years no special repayment will be made.

The arguments from are valid – you should think it over.

But – many roads lead to Rome. WE are doing it similar to how you have planned. We agreed on the lowest possible repayment rate. Regardless of that, we have calculated how much we would have to pay to reach a 6% annuity. The difference is nicely parked in a daily allowance account and then used at the end of the year as a special repayment. This way, a potential problem with extension and higher interest rate is also solved, since we end up with the same amount that we would have had with a direct 6% annuity. Sure, you might save a few euros with direct repayment due to compound interest effect. We generously add that amount to the special repayment. The reason for this is relatively simple: we wanted to remain as financially flexible as possible. We did not want to get into trouble someday when, in addition to normal costs and special costs, additional, unplanned, and sudden costs arise. Or if suddenly significantly less income is available in the meantime.

By the way, the KfW loan will be paid off after 10 years with a then fully accumulated home savings contract. The rate that becomes free will be used for further special repayments.

I can’t say much about how viable your concept is, as I don’t have an overview of your income, expenses, etc. However, this concept works – under ONE condition: CONSISTENCY. You must consistently make your special repayments in the planned amount. Of course, there can be occasional outliers that should then be balanced out later.

But please consider the hints given here regarding planned/unplanned children as well as proper planning. Especially children could completely throw your concept overboard (we waited with building until this planning was completed).

He can, at least with 1% repayment.

15 (or rather 14) years fixed interest probably because the loan would be settled with regular special repayments. I can't quite understand why the objection "only a few people do that anyway" always comes up. Are there empirical studies on this or do you take your knowledge from somewhere else?

I think most people tend to spend the money rather than use it as special repayment. We had the same experience; in our circle of acquaintances almost everyone did not use the special repayment and therefore everyone advised us to rather choose a higher repayment rate. We didn't want to burden ourselves with a high repayment and also took advantage of the special repayment option... we are in the 2nd year and will already use it this summer :-) Ultimately, it really depends on the individual but very few people seem to be that consistent.....

Good morning dear forum,

thank you very much for the previous answers. As I now read from the individual posts, it ultimately depends on our discipline.

: Exactly that was our consideration as well.

We also plan to move the amount X monthly to a separate account and use it for the special repayment.

Purely mathematically, we could also afford double the rate monthly, but then it would be quite difficult in case of something unforeseen, because there would be little room to maneuver.
It is also about first seeing what really goes out monthly after the first year. Then we can raise the rate a bit in the second year.

In principle, our offer does not seem bad and quite feasible, right? The hint that if there is a special repayment, it should be consistent was also received and will be taken into account.

We still have an appointment with another provider this week and I would be happy if we or you could take another look at it ;)

Thanks and regards