Financing a condominium: full repayment or not?

Hello everyone, we (2, without children, not planned) want to buy a new-build condominium (Kfw 40+) and I wanted to hear what you think about the financing offers. The house is currently being built and is supposed to be finished by the end of Q3/23. At the moment there is only an excavation pit, the finished basement will probably come in 2-3 weeks, the ceiling of the basement still this year if the weather allows. Equity: €150,000 Loan: €281,000 intended monthly rate: around €1,500 (+- €100 doesn’t matter) monthly net income: €6,000 after deducting living costs: €3,700 = double burden rent/loan installment: after deducting the monthly rate we have €2,200 net left per month. We prefer a term of about 15 years, then everything should be paid off. We would like to apply for the Kfw funding as a grant, so take the loan completely from a bank. We think the timing of the payout suits us well, then you can still buy furnishings or use it for special repayments. We also thought about a fixed interest period of 15 years, but in the end, it’s a calculation matter. Full repayment would also be an option. I was offered for example (both Commerzbank): Option 1: 0.88%, 15 years fixed interest, monthly rate €1,500, residual debt €32,000, special repayment 5%, free of commitment interest for 12 months, afterwards 0.25% monthly. Option 2: 0.84%, 15 years fixed interest, monthly rate €1,660, full repayment, special repayment 5%, free of commitment interest for 12 months, afterwards 0.25% monthly. Option 3: I was just at my savings bank, but the lady sent me away without information, she said she would embarrass herself if she showed me the offer without further negotiation with her supervisor o_O Now my questions: 1) What do you think of these conditions? 2) What is your personal preference, Kfw as a grant or via Kfw loan combined with bank loan? 3) Prefer a higher repayment rate (about +€150 monthly) than full repayment, or with residual debt? The rate does not differ that much, special repayments should be possible in both cases. 4) What do you think about the risk of a fixed interest period of only 10 years? There the residual debt after 10 years would be €107,000 with the same rate. We think interest rates will surely not be where they are today. But where could they realistically be *crystal ball* 5) Maybe you know about this, I just heard about it for the first time. If you take Kfw money as a grant, you have to submit the application to Kfw AND wait until it is approved. Only then you may sign the purchase contract. The application was clear to me, but not the approval. What do you know about this? Do you have experience how long that can take? I look forward to your feedback :) Thanks & best regards

A different question, since this has happened here more than once. Do you get the kfw 40+ subsidy, or does the developer grab it beforehand (as is common)? Watch out for this, because there have been a few threads where people assumed they were entitled to the kfw 40+ subsidy, but the developer had secured it beforehand.

What advantages or disadvantages do you see in handling the financing through the broker? He is also a credit broker.

One advantage would be that he is more familiar with the process of building a house than another broker, but how important is that?

However, his offer is slightly worse, at 15Y ZB +0.08% (0.96%) compared to the offer from my initial post

Then he should make a suitable offer. Otherwise, you just sign somewhere else. Quite simple. Over 15 years, that’s a saving of roughly €1,500.

So we asked several times and he assured us several times that we would get it. The energy guy gives us these 7 pages of documents and then we could apply for it. However, I don't know how I could protect myself there, KfW doesn't give me any information about it.

Yes exactly, it is probably even a little more € savings