Financing offer evaluation and question about mixed interest rate

  • Erstellt am 2021-10-13 23:48:40

Alexius

2021-10-19 17:32:45
  • #1
I don't think much of building society combination products. The effective interest rate is usually always higher than comparable annuity loans. In the first 15 years, you only pay the interest – the rest goes into the building savings contract and is virtually not interest-bearing. This means that in the first 15 years, you do not reduce your loan by a single cent, no matter how much you "make special repayments" – it all just ends up in the building savings contract without interest.

For me, it's only a product that is interesting for customers who cannot get a regular annuity loan and for the advisors to fill their pockets – since there are high upfront costs and high commissions.

Presumably, the effective interest rate in your case is 1.6-1.7 percent or more. (I haven't recalculated it)
 

HubiTrubi40

2021-10-19 22:47:29
  • #2
That’s true, but I have to calculate the interest costs against it. Since I still have a parallel running annuity loan of 200k, I would instead prepay this one for the first 10 years. Then, in the best case, it would be almost gone after 10 years. At the same time, I have a certain security over the entire term, which I find not insignificant for myself. Instead of "prepaying" the building savings contract, I thought about running an ETF savings plan in parallel, which I would let run for several years. In the best case, after the maturity of the forward loan, I can already put a good portion in and then shorten the term of the allocated building savings loan, so that ideally I am done after 20 years. But that is wishful thinking. And in the worst case, I pay a fairly bearable rate until retirement. Definitely, in the case of an early sale, the terms are worse than in the annuity loan. But I think in the end, you cannot perfectly cover every case.
 

Alexius

2021-10-20 00:09:56
  • #3


But you will still have to pay into the building savings contract during the first 15 years. The big disadvantage is that this entire part does NOT contribute a single cent to the repayment of the loan. Your rate is therefore as high as with the annuity loan, but you pay interest on the entire loan amount for 15 years. In my opinion, that never adds up.

That means you might as well just get an annuity loan and still carry out the rest of your plan. (Provided you still have money left over for the rate)
 

HubiTrubi40

2021-10-20 01:09:34
  • #4

But I have now calculated the costs for interest and incidental expenses and, on balance, I end up paying less than with the 15-year annuity loan. The problem is that I don’t exactly know how much I will pay in special repayments. I agree with you that if I were to repay more on the pure annuity loan than on the building savings contract, I might reach the point where the advantage of the combination product cancels out. But here I can secure the interest rate. Of course, it can also backfire. Nevertheless, the effective interest rate of the 15-year advance payment loan is still below that of the 15-year annuity loan.
 

Grundaus

2021-10-20 08:08:52
  • #5
roughly calculated, at 1% repayment and 1% interest, this is a 0.15% interest increase, over 15 years on a 200,000€ loan 3,000.-- additional costs i.e. not even a beer per month or not even 1 liter of diesel in 15 years
 

RotorMotor

2021-10-20 08:53:17
  • #6
[Roughly calculated, with 1% repayment and 1% interest, that is a 0.15% increase in interest, over 15 years with a €200,000 loan 3000.-- additional costs, i.e. not even a beer per month or not even 1 liter of diesel in 15 years]
What kind of strange calculation is that?
 

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