Interest rate fixation 10 vs. 15/20 years

My crystal ball also tends to say lower.

I have a good gut feeling about KFW after 10 years and a second part after 15 or 20 years, depending on the amount of the remaining debt.

Personally, I don't think much of Bauspar contracts, but they are currently said to be not completely uninteresting...

Personally, I don't think much of home savings contracts, but they are reportedly not entirely uninteresting at the moment...

Home savings contract as security for the KfW after 10 years maybe, but when you consider all the fees and missing interest, I don't know if parallel saving on the instant access savings account + fixed deposit with higher interest rates isn't a better choice.
If the KfW interest rates are really quite high after 10 years (KfW is just a small component), you also have built up a highly interest-bearing capital stock. With that, you can then accelerate a quick repayment of the loan in the following years by reducing the repayment of the main loan as much as possible and steering everything towards repaying the KfW.

Good morning everyone,

thank you very much for the answers you have already sent!

FMH also has a calculator for comparing terms. Then you know from which interest rate on the follow-up financing you will be better off with the longer one. Whether that is to be expected... your decision.

Exactly with that, the approx. 4.6% were determined. That’s why we are currently thinking about it and I wanted to hear your opinions...

But I don’t know how we would decide today.

Thank you very much for your detailed explanation! I think at 3% interest and less, we would definitely have gone with a longer term. In my opinion, we are right on the borderline.

I currently find today’s environment too volatile to generally go for a 10-year term. I rather prefer the 20-year fixed interest and see the premium as an insurance premium.
Only a potential KfW component would be an exception for me; the “gain” through the lower interest rates in the first 10 years would be worth the risk to me in the following 10 years.

We think our "insurance premium" lies in the missed returns of our savings in the building savings contract. This should cover about half of the remaining debt with approx. 1% interest. We are now wondering whether that is enough “coverage” for the period after 10 years...
We do not have a KfW component, since the KfW interest rates at the time of the offer were not significantly below the bank rates.

Building savings contract as coverage for the KfW after 10 years maybe, but if you consider all the fees and missed interest, I don’t know whether parallel saving on the daily money + fixed deposit with higher interest rates is not a better choice.
If the KfW interest rates after 10 years are really high (KfW is only a small component anyway), you will have also built up a highly interest-bearing capital stock. With that you can then accelerate a quick repayment of the loan in the following years by reducing the repayment of the main loan as much as possible and steering everything towards repaying the KfW.

As mentioned above, we do not have a KfW component but already have the existing building savings contract. This is supposed to cover at least just under half of the remaining debt. From my point of view, these are “my” costs for the coverage (closing fee, missed interest during the savings phase; although the fee was of course paid already a year ago). Does this sound reasonable from your point of view? Changing it is difficult anyway, I think...

This is the chart over 30 years currently. It is a difficult time for a forecast. My gut feeling also tends to "goes down again," but no one can know for sure. There were also forecasts that with 2-3% interest rate increases certain European countries would go bankrupt, but that has not happened so far.

The existing debts also still have a certain term. The average term in Italy, for example, is 7 years. In this respect, one year of higher interest rates is not initially so harsh. It becomes interesting when this becomes entrenched and the existing debts have to be replaced. I estimate that the central banks hope that by then inflation will have gone down enough that interest rates can also be lowered somewhat.

What allows us to sleep well: we have fixed half the loan for 10 years and the other half for 20 years. If interest rates rise, we only have half the risk because of this.

We did something similar. Just under 40% for 30 years and the other 60% for 10 years. We were able to secure 2.4% at the beginning of last year. Using the FHM calculator, I calculated that interest rates could be at 6% in 10 years, and we could still barely afford it if the salary remains the same. However, it will certainly rise again in the next 10 years. If interest rates are lower than 2.4% in 10 years, we will refinance everything together with a cheaper loan.