Financing with a building savings plan or a classic loan?

I have 2 loans with a term of 10 years and 20 years each, without KFW. Both are slightly higher than yours but with roughly the same structure. My interest rate for 20 years is slightly higher because I concluded it a little earlier. For the larger loan, I chose a minimum of 20 years and at least 10 years between the two components. That gives me more security. Can and do you want to make special repayments? Maybe try to get an offer without KfW?

Do not focus on the "savings interest rate" with building savings! With it, you are buying interest rate security. Since the yield interest rate is equally low for all building savers, the "low" loan interest rates can be "secured."

With the building savings contract, you can sleep more peacefully... Decide your risk! But in any case, ask a financial advisor to request conditions from banks for you!

It’s like this: with the building savings contract, you save for 15 years and this money doesn’t earn any interest, while interest is accruing on the full debt the entire time. That’s why after these 15 years you definitely have a higher remaining debt than if you start repayment immediately (with the same amount of money). But in return, there is the security of the interest rate after the 15 years. I would calculate the difference in the remaining debt between the two options (i.e., annuity loan with immediate repayment start and the building savings contract option). Then you can roughly find out from which interest rate in 15 years one or the other structure becomes cheaper. I can only agree with , it’s an individual decision: security or “risk.” Also consider, in 10 or 15 years... €100 today will be €122 or €135... with 2% inflation... incomes also rise, which is noticeable; so you can also manage a higher rate and still don’t spend a larger share of income on housing.

All good thoughts. Also good that I am still hesitating a bit. Through a few contacts, I learned today about the new KfW changes, especially for KfW 124 from 01.10.2019: the provision-free period is increased from 4 to 12 months and the maximum loan amount from 50,000 to 100,000 euros, probably at 0.5% interest. The rest, that is 180,000 euros, could then be fixed with annuity for 20 years at interest, which might be a good compromise. Then there is certainly an even better interest rate through the bank, since the amount is smaller. Even if the interest is fixed over 20 instead of 15 years.

Does that sound like a good idea?

Good morning, I was just doing research for my own project, a course on real estate financing, and I got stuck on your post. Now I can’t continue researching because I have noticed the dilemma you are in.

It simply doesn’t seem to be settled yet, so the hesitation and being “torn back and forth” is understandable. By the way, I see it the same way:

[*]Your concerns about the KFW loan are correct, after 10 years the interest rate is renegotiated. -> Risk of a higher rate.
[*]The building society loan usually has a higher loan interest rate. -> Current alternatives could therefore perform better.
[*]The advance loan has no repayment, so the accumulation of interest payments is significantly higher.
[*]It should also be considered that with the building society loan a new creditworthiness / property check must be carried out. -> Risk - no follow-up financing after all, “saved” for nothing plus the inflationary loss.

Since I don’t have all the background information for a recommendation, here are two thoughts from my practice that might lead to a better result:

1. Stay flexible, the mix makes the difference

Financing with KFW 100,000€:

a) Choose a higher repayment for the KFW loan, possibly as a full repayment, so that the residual debt after 10 years is very low and a higher interest rate keeps the new rate calculable and affordable (as an example assumption, 5% interest rate in 10 years could be assumed).

And so that the possibly higher interest rate risk with the KFW is factored into the overall burden -> b) choose the main loan with minimum repayment (probably 2-3%) and flexibly play with the annual special repayment (approx. 5%).

2. Financing with fixed interest rates without KFW is currently worth a comparison

(Full repayment) financing over 20-25-30 years. Those who want/can repay faster or more flexibly should best work again with an annual special repayment.

Conclusion:
1. Variant could save interest costs (please study and understand the relevant KFW programs carefully)
2. Variant is simple, transparent and offers maximum planning and security.

The building society saver variant would not be an option for me, but one could make sense for future modernizations (plan ahead) to reserve a low-interest modernization loan in 15-30 years.

So, thanks to you I am now registered here and of course continue to follow this thread and the forum.

If you have further questions or get stuck, feel free to contact me.

In any case, I would be happy if you share the result of your successful financing negotiations with us. -> I like HAPPY END’S