Home Construction Financing Single-Family House - Annuity Loan vs. Combination Including Building Savings Contract

Hello dear house building experts,

like so many at the moment, we also have the dream of owning our own home and want to build a house. I have been reading the forum diligently for a while and would like to have your assessment of our construction project.

Here are the key data about us:
My wife 27 (office clerk) - regional mechanical engineering, 1650 net, 13 salaries -
Me 27 (field service - wholesale), 2100 net, 12.5 salaries +
bonus payments (not considered, planned guaranteed special repayment 1000 EUR p.a.)

Total net income: 3750 EUR per month

Rental income from existing condominium per month 390 (cold) installment existing loan 315 EUR (term about 17 years left, fixed interest rate for entire term),
remaining balance 65,000 - market value 127,000 EUR

current cold rent 680 EUR (warm 870 EUR)
current savings amounts per month (total 480 EUR)
no other loans

Cost overview:
Plot 45,500 EUR (no broker fees) - 657 sqm
Construction costs incl. own work 270,000 EUR
Financing requirement: 285,000 EUR
Equity 15,000 (for incidental costs),
remaining own work (painting/flooring, outdoor facilities), provision of material through direct purchase via wholesale with own-use discount as well as lowest hourly rates for the sanitary/electrical trades (good customer of mine)

Loan-to-value approx. 90 %

Offer 1 - Dr. Klein (combo DSL loan + BHW home savings FX2N)
Repayment-deferred loan 2.52/2.63 % (nominal/effective) (secured by the home savings contract)
Special repayment up to 5 % possible.
Financing volume: 285,000 EUR
20 years fixed interest 598.50 EUR per month
Home savings contract 467.40 EUR per month (16 years)
Total = 1065.90 EUR
Total costs, entire term:
Payment 429,837.00 € - 144,837.00 (interest)

Offer 2 - Interhyp (Hypo) - 30 years
Financing volume: 285,000 EUR
Annuity loan monthly rate: 1149.50 EUR
Nominal interest rate 2.75 % (effective 2.8 %)
30 years fixed interest, remaining debt after fixed interest period: 17,869 EUR
Total costs (within interest period):
Payment 409,352 € - 142,232.33 EUR (interest)

Our personal limit is 1,100 EUR per month to have enough "room for maneuver" for vacation, reserves, other expenses in the future.
Children are not planned within the next 5 years, but afterward, yes.

Personally, I have read a lot of negative things about the home savings variant as well as about DSL Bank
(difficult or inflexible regarding disbursement, recognition of documents, etc.)

What is your opinion here? I find the interest rate with the Hypo too expensive, but justified due to the high loan-to-value ratio.

Thank you very much!

I would always choose an annuity loan. I would never tend towards offer 1 because of 50€. Besides, it is often the case that after allocation you have a higher total rate. But the experts here can explain that to you better than I can.

Rental income from existing condominium per month 390 (cold) Installment existing loan 315 EUR (remaining term approx. 17 years, fixed interest rate for entire term), still outstanding 65,000 - market value 127,000 EUR

Loan-to-value approx. 90 %

Has it been considered to include part of the land charge in the financing?

Remaining own contribution (painting/flooring work, outdoor facilities), provision of materials through direct purchase via wholesale with own use discount as well as the lowest hourly wages for the trades plumbing/electrical (good customer of mine)

Can you break down the own contribution into material costs/low hourly wages and "muscle equity"?

Bonus payments (are not considered, planned guaranteed special repayment 1000 EUR p.a.)

However, this is not considered in the financing. So why take a 30-year loan?

Our personal limit is 1,100 EUR per month

But you are well aware that unplanned additional costs can always occur during construction? Is there enough buffer planned?

Personally, I have read a lot of negative things about the building society savings variant as well as about the DSL Bank (difficult or inflexible with disbursement, recognition of documents, etc.)

Building society savings per se is sometimes good, sometimes bad with regard to costs.

I am a bit confused by the fact that with the DSL/building society contract construct you pay almost 20,000 EUR more over time (although only 2,000 EUR more interest are listed).

Sum = 1065.90 EUR
Total costs, entire term:
Payment 429,837.00 € - 144,837.00 (interest)

Annuity loan monthly rate: 1149.50 EUR
Nominal interest 2.75 % (effective 2.8 %)
30 years fixed interest, remaining debt after fixed interest: 17,869 EUR
Total costs (within the fixed interest period):
Payment 409,352 € - 142,232.33 EUR (interest)

Regarding DSL. Yes, it can be very specific.
What are you building with? General contractor? Architect with individual assignment?

Thank you first of all for the answers!



According to Dr. Klein, it would make no sense to take out an additional mortgage on the condominium. The broker said that due to the "relatively high" remaining debt of about 65,000 EUR, not enough would remain as a mortgage because no one relies on the market value.

I can break down the own contributions in detail through savings I get on the materials (e.g. electrical as well as sanitary equipment and the steel needed for the building project). For the painting/flooring work, the material costs are included, and the labor is considered as own contribution (calculated realistically).

The special repayment is not taken into account - that is correct. So far, neither Interhyp nor Dr. Klein have included this in the financing, although the 1,000 EUR will definitely be paid.

Regarding additional costs, we have a relatively small buffer of 7.5% in the financing. If this is not enough, we still have building savings contracts of about 11,000 EUR that we could dissolve, for a small fee.

The first offer is calculated for a total of 36 years; after 20 years, the loan will be taken over by the building savings contract. The costs are for the entire term. The second offer is fixed for 30 years; however, a remaining debt of about 18,000 has not yet been included in the costs.

We are building with a local construction company, awarding the trades individually (through an architect). Construction supervision will be carried out by the Bauherren-Schutzbund.

well, €49.50 over your limit and quiet as a mouse (30 years) I would take

Why such a long fixed interest period?
Do 20 years, with 90% loan-to-value ratio you then get a rate of just under €1100 with 2.5% repayment and 2.17% effective interest, and after 20 years you still have a manageable remaining debt of €107k (if you don’t make any special repayments).
Interest costs in this example are ~€86,100.
Many banks don’t allow €1000 special repayments, there is usually a minimum amount of €3-5k.