Home Financing - Decision Aid

Hello everyone,

I need your help. What would you decide on?

Financing: €187,000 (100% financing)

Offer 1:

KfW €50,000 at 1.40%
Repayment 2.8%
Rate: €175
+
Annuity €137,000 at 1.50%
Repayment 4.41%
Rate: €675

Total rate: €850

However, only 10 years interest rate security!

Offer 2:

KfW €50,000 at 1.40%
Repayment 2.3%
Rate: €154.17
+
Building savings contract €137,000
10 years rate €712.17

Total rate: €866.34

For repayment substitute funds, the monthly rate from the building savings contract is €540.92
Why is the monthly burden shown as €154.17 + €712.17 and the rate of the building savings contract only €540.92?

In any case, the nominal interest rate in the building savings contract is secured at 1.95% for the next 10 years after 10 years.

Which offer would you choose and why?
Thank you very much for your help!

Addendum: Fee for building savings contract €1370.00

Hello everyone,

I need your help.
What would you choose?

Financing: €187,000 (100% financing)

Offer 1:

KFW €50,000 at 1.40%
Repayment 2.8%
Rate: €175
+
Annuity €137,000 at 1.50%
Repayment 4.41%
Rate: €675

Total rate: €850

However, only 10 years of interest rate security!

Offer 2:

KFW €50,000 at 1.40%
Repayment 2.3%
Rate: €154.17
+
Building savings contract €137,000
10 years rate €712.17

Total rate: €866.34

For repayment replacement funds, there is a monthly rate from the building savings contract of €540.92.
Why is the monthly burden listed as €154.17 + €712.17 but the rate of the building savings contract only €540.92?

In any case, the nominal interest rate on the building savings contract is secured at 1.95% for the following 10 years after 10 years.

Which offer would you choose and why?
Thank you very much for your help!

Hello Nescool,

Some information seems to be missing here:
The respective KfWs have different repayment rates. Accordingly, there must be a difference between the two. I suspect it is the fixed interest period. So, what is the fixed interest period in Kfw offer 1 and KfW offer 2? If the fixed interest period is the same - why do you pay less repayment in offer 2?

Regarding the building savings contract in offer 2: Based on your explanations, I assume the savings phase is 10 years. What minimum savings amount (which quota) must be reached?
Additionally, the building savings contract will likely be coupled with a repayment deferral loan (€137,000), which will then be repaid by the accumulated building savings contract (with a loan interest rate of 1.95%) over 10 years.
Presumably, the €712.17 consists of the savings portion of the building savings contract amounting to a monthly €540.92 and the interest on the repayment deferral loan of €171.25. Then the TA loan would have an interest rate of 1.50%.

I speculate a bit further:
If I multiply the €540.92 per month over 10 years, I assume a 50% savings quota of the building savings contract.
Accordingly, after the savings phase, you should have a loan amount of about €68,500, which is financed at 1.95%.
Since, according to your statement, this loan will then be repaid over another 10 years, you will be paying a monthly rate of about €640 for the building savings contract loan. On top of that comes the burden from the KfW (or its extension).

Please note that with a building savings contract, a conclusion fee of X % and possibly a loan fee will be charged.

Good morning

I suspect that the KFW was adjusted so that our desired rate of approximately €850.00 is not exceeded.

Unfortunately, it is nowhere clear which quota must be met.

Hello!

Why is there 154.17 + 712.17 under monthly burden and only 540.92 under the rate of the building savings contract?

The difference is the interest for the interim financing loan until your building savings contract is ready for allocation.
Indeed, a few details are missing here. I have now calculated everything with a 10-year term and deliberately kept the follow-up financing separate.
Assumptions:

[*]Same annuity for both variants (balanced if necessary by special repayments)
[*]Interest fixation for KfW and loan for 10 years
[*]Building savings contract: 4 per mille loan repayment, 15 euro annual fee, 40% minimum building savings sum and direct allocation upon reaching this

Of course, this is only a rough calculation.
Break-even is at an interest rate of 3.4% for the follow-up financing.

Good morning

I assume that the KFW was adjusted so that our desired rate of approx. €850.00 is not exceeded.

Unfortunately, it is nowhere visible which quota must be achieved.

Since the conditions are specified by KfW, to my knowledge there are only a few levers that influence the monthly rate. Take a look at the fixed interest period. A second option would be the total term. A third possibility is possibly the years without repayment. The KfW can be run without repayment for a max. of 3 years (so you only pay interest for 3 years). If you decide, for example, on only 1 year of repayment freedom, the calculated repayment rate (%) will be lower - logical: you have 2 more years to repay.

I can’t think of anything else. I guess it’s either 1 or 3.