Financing with building savings loan + KfW + subordinated loan

I financed my outdoor facilities with a pre-financed building savings contract. I wanted to do it right away, and it was not included in the original financing for the house. The structure (for me it is only a manageable amount) runs over 10.5 years, 6.5 years of saving, then repayment of the pre-financed loan with the saved portion and building savings loan. Although the interest rates are initially very low (1.5% on the pre-financed money, then 1% on the building savings loan), a consumer loan with 3% interest would have been cheaper in terms of total interest payments. And that is only because you practically earn no interest on the saved money but always pay interest on the full amount. That is why I believe you have to calculate very precisely whether a building savings contract is worthwhile – and I suspect in most cases it is not. I did it anyway because I wanted the installment to be a bit lower in the near future. However, after the savings phase, I will repay the loan as quickly as possible.

Your situation is obviously much more complex than can be seen in the initial post. How is it, wasn’t it said several times in other topics here: when changing properties within one bank, you can avoid the prepayment penalty? In that sense, you should see about staying with the Sparkasse. Bring this up specifically!

I also have the "mess" with the KfW, I need a follow-up financing for the remaining debt after 10 years (starting value €50k), which is actually too meager for the "normal" construction financings. The main part of the loan runs longer. Let’s see how I handle it; time will tell.

To deliver once again:

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Construction is taking place in Schwäbisch Hall
[*]The apartment has a current value of approximately €240,000
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[*]Was estimated by 3 different real estate agents at about ±€5,000
[*]Stands out somewhat due to the very extensive renovation
[*]Outstanding debt in 4 years at the end of the interest period ~€90,000
[*]Outstanding debt today €130,000
[*]I already inquired about prepayment penalties 5-6 months ago; at that time, the Sparkasse rounded up and demanded €25,000 in prepayment penalties. Whether this has since been reduced would have to be inquired again.
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[*]When I asked to waive this because we would like to finance again through the Sparkasse, the advisor declined. After all, the old interest rate was significantly higher, and the Sparkasse would lose a lot of money compared to the new loan.

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I would want to sell it for several reasons; in the future, I do not want to constantly set aside money for the apartment in case something happens. I think one house is enough for me; I don’t want to be a janitor for a second property. However, I don’t want to pay the €25,000 to the Sparkasse; I’d rather wait 4 years and then sell.


[*]I would want to put much of the profit into paying off the new house.

I say: get rid of the apartment! And please have it checked whether there really is such a high prepayment penalty. With the sale and EL, you actually have good equity based on the current situation.
Actually, I'm not a fan of it, but it would probably make sense here to break down your financial situation. There are only small bits of info coming in. Just like with your situation.
A forum member wants to help. You remain vague with "near Schwäbisch Hall." That could be anything or nothing.
I know it's strange to disclose information on the internet. But only this way can you really get help here regarding financing.

I totally agree!

I don’t want to pay the 25,000€ to the Sparkasse, I’d rather wait 4 years and then sell.

That is basically understandable. However, the loan-to-value ratio of the home financing changes significantly if you were to contribute more equity. That can be worthwhile.

Please note another thread with [Bausparer]

Currently, it would bring in €100,000 more if sold than what we paid 6 years ago. If I deduct the €25K, about €75K profit remains. The outstanding debt in 4 years is approximately €90K.

I actually don't want to act as a landlord, but due to the renovation and other benefits like a good location, €850 rent can be charged, for which it should then also be rented out.

Attention, attention. Has the apartment been used exclusively for personal use? If not, the profit must be taxed with the personal tax rate. If yes, all good. Just as a note.

Nevertheless, I would review the rental situation with your tax advisor. As a landlord, you can claim the loan interest and all repairs etc. as tax-deductible expenses. It adds up over the year. Under certain circumstances, this can definitely be worthwhile.