Financing offer. What do you think?

Hello. We want to build for about 380,000 euros. Minus own contribution (20k) and equity in the form of the paid land (30k) and equity of 42k, we have a sum of 290,000 to finance. We would like to approach it with an annuity loan from our side. Rate 1,100 per month. Interest offer 0.95% nominal interest rate with a repayment of 3.6 percent and a term of 15 years. Unfortunately, our bank does not offer a longer term. The residual debt would still amount to 135k. Special repayment 5% annually, interest-free provisioning period of 15 months. Ten percent of the sum can be given free of charge if not used. According to the bank, there are no additional costs for all points and in general. Repayment rate change is not possible. For me, a plus point is that the bank does not require invoices for every little thing. What do you think about the offer?

What bothers me is the 15-year term.

The bank also alternatively offers to conclude a home savings contract in addition to the loan and save separately for 15 years with 240€ per month. That way, interest would be secured. We could freely choose the amount of the home savings contract - so it does not matter whether we only take on 50k or the full 135k.

Well, why do you feel tied to the bank? I would never get offers from only one bank. Maybe our parents' generation still did that.

The interest rate itself is good, but whether it is the optimum for you can only be found out with comparison offers. And by that I don’t mean just the pure interest rate or the decimal place, but the whole package (desired term, special repayment options, non-utilization of x% possible, changes in repayment rate...).
But if you want a longer fixed interest period, get offers from a broker for that. Especially if you are really considering the building savings contract. Then definitely compare an annuity loan with a longer term.
What fees are charged for the building saver? Have you understood everything? The structures are much more difficult to assess than an annuity loan.
I don’t take the offer my house bank proposes to me, but the one I feel most comfortable with.

Would the interest rate worsen if you, for example, took out 10-20k more credit? Loan-to-value ratio?
If it doesn’t worsen the interest rate and you have the option not to draw 10% or to return it, then I would apply for this buffer. There is no risk if you don’t need it, but having a buffer is always good. It will be more expensive than planned anyway.

Thank you for the feedback. We will definitely look for more offers and are actually still with a broker. We have already included a decent buffer in the amount. I assume that we can return 10-20k.

With the building savings contract I already feel like I have understood everything. I did a lot of research beforehand and am therefore against a building savings contract as a combined loan. That is why the bank has now offered us the building savings contract as an addition. Among other advantages: the loan is fully repaid immediately. Among other disadvantages: the rate is 240 euros more expensive than planned.

In addition, our bank wants to handle the KfW loan of over 50k themselves. More is not planned because it will not be a KfW 55 house. However, the KfW loan was not calculated for us since it would only be minimally cheaper at 0.85 instead of 0.95. But then we would only have a 10-year term for the loan. What do you think of this statement?

Very clear: Obtain further offers. 135k remaining debt is simply too high, you are right about that. Choose 20Y.

So in 15 years still about 1/3 of the house value as remaining debt... what exactly is "too high" about that? The interest rate is good (maybe you can squeeze out another tenth somewhere, possible). A lower remaining debt can therefore only be achieved through higher repayment. That depends on whether the income allows it. And if it does... you just use the special repayment and that's that. In 15 years the remaining debt will also be correspondingly devalued thanks to inflation, that is really manageable and should be refinancable, even if interest rates rise! With today's rate of €1100 alone, about 10% for interest and repayment are available with this remaining debt.

135k are 46% of the total loan.
At the end of the term:

• Interest increase by 2%:	1,302.52
• Interest increase by 4%:	1,505.46

20Y (1.11%) -> 56k remaining debt

Interest increase by 2%:	1,232.13
• Interest increase by 4%:	1,326.0

The 20Y costs about 5k more in interest over the entire term, assuming constant interest rates.
In the end, it is always also a question of the need for security.
Only with these low interest rates should you keep them fixed for as long as possible.