Fundamental questions about financing

So here I am again. After the first offer with 2.6% for 20 years fixed interest at a loan-to-value ratio of about 65% was very high, I requested a second offer with 5 years fixed interest. The interest rate for the 5 years should be just under 1.6%, which of course again represents a very high premium over the market conditions. With the intermediaries in the online calculator, I would be at 0.6-0.7%, so a premium of 0.9-1.0%. I am really torn back and forth. Of course, I could take the 5 years and hope that interest rates do not rise above 3.5% (for 15 years). From 3.5% interest on the remaining 15 years, the interest paid would make the split loan more expensive. The re-registration in the land register after 5 years and any other fees/costs are not yet included.

Thank you for the feedback. Well, it was to be expected, right? As I have written several times before, you have to decide for yourself whether you want to do it. None of us knows where the interest rates will be in 5 years for a 15-year fixed interest period. If you accept the offer, at least have a 10% prepayment option included. If you then use this up to the limit, you can still save on interest for the 5 years here.

The 5% special repayment is enough for me, beyond that I will not be able or willing to make special repayments. I have already calculated a special repayment of 600€/month over the 5 years. Just wrote to the bank again to ask how much the interest rate would change if I were below 60% loan-to-value. Maybe there’s still a little something (0.1%), hope dies last.

sorry, I really have 0 understanding for the business conduct of Sparkasse. It may be that they have to struggle regarding the interest results, but then earn 1 on the sale + 2 by not setting a market-related interest rate there yet. A certain interest surcharge is OK. But then 1% above the market interest rate. No, under no circumstances. It would have to be the last property in the area and a super premium 1 AAAAA property.

I wouldn't buy it on principle

These are already the last plots. In terms of location, it is right in the middle of a new development area. As already described by others before, I don't have many options. Either bite the bullet, whether at 1.6% for 5 years or at 2.6% for 20 years. Or alternatively keep searching with the risk that it will take longer and the construction costs will continue to rise by about 15,000€ per year. The 15,000€ increase in construction costs per year first needs to be recouped through the saved interest rates. The trend of sharply rising construction costs is expected to continue at least until the end of the application deadline for [Baukindergeld] at the end of 2020.

It has already been written: Deduct the costs of financing through the Sparkasse (TOTAL!) from the costs of market-standard financing and include that in the purchase price.

Is the property worth that? If not, stay away from it. Unless you are so financially secure that it simply does not matter to you if you make a big loss on the deal. However, the purchase really should not significantly affect your financial situation, and then you probably wouldn't be here.

How long have you been searching in that location?