Help with the selection of financing. Total capital requirement €500,000

Hello,

I am not an expert and wanted to ask if you could give me more tips or what you think about the offer I received. ( unverbindliche Voranfrage )

Total capital requirement 500,000 euros
Equity: 1,900,000 euros

So I was offered 310,000 euros with an interest rate fixed for 25 years at 2.1%.
With 2% repayment
All this through a financial service provider and the lender would be Ergo Versicherung.

Or I take a 20-year fixed interest rate, then it would be 1.9%.

Now I am still considering whether I really want to commit to the 25-year fixed interest rate.

I planned to go to my main bank with the offer and ask if they would match it.

I could also get 2x 100,000 euros (due to an additional rental apartment) from KFW but only with a 10-year fixed interest rate if good rate, with 20 years fixed interest it would be 2.6%
:-( however 2x 10,000 euro loan reduction through Kfw 40 standard.

Now the question to you. Should I finance differently or is this already good?
Or in combination with a building savings contract? Haven’t necessarily heard good things.
I am more the type to prefer security.

Thanks to you

It depends. 0.2% more for 5 years is okay. But one should ask whether 2% repayment is acceptable. That way you never get rid of the remaining debt. Better to choose 20 years, increase the repayment and build up a bit of pressure.

20% longer fixed interest period for just under 10% higher interest rate is not bad at all. If you want a longer fixed period, I would go for that. But also think that with the 20-year condition you can still do better. Ask HVB or Allianz, they are currently quite good.

The topic of repayment is controversial. I am more of the opinion that anyone who repays more than the minimum necessary at the current interest rate is to blame themselves. It is better to invest the money; even if you mess up badly in the process, you will end up better off.

Opinions differ when it comes to repayment. I am more of the opinion that anyone who repays more than the minimum necessary at the current interest rate is to blame themselves. You can invest the money better; even if you mess up a lot doing so, you end up with more in the end.

I don't find the joke funny. Anyone who only has 2% repayment in the rate at this level has been badly advised. The highest return you can currently achieve is the (special) repayment.

Show me a guaranteed return with virtually zero risk, tax-free, of 2.1%. To stick with the example of the ETFs.

Your approach might work out, but it can also end in a loss with the real estate. In the end, one is probably wiser.
Ultimately, you hedge your real estate with stocks. Two completely different risk categories. I don't think it's smart.
But that's also because an entire generation of builders, for example in the 90s, got burned by this. They didn't pay down their loans and instead saved into a capital life insurance policy and calculated with surpluses based on past performance.
The situation today is the same. Everyone who has invested in an ETF in the last 8 years has earned good returns and believes it will continue that way. Eventually, things go downhill and then panic selling begins ...