Interest rate fixation - financing assessment

When the second child arrives, it will probably get tight at first.

Or does it make sense to start with 2.5% for 1-2 years and then move down to 2% (usually you can "only" switch once)?

That is something everyone has to decide for themselves.

In this income situation with two children, I could repay such a loan with 3%.

Whether and what is possible is a negotiation with the bank. If once is possible, twice is also possible. Just at what price...

Apart from the fact that the costs for the house, incidental construction costs, and garage are probably too low, a few other costs are also missing, such as landscaping, kitchen+furniture, painting and flooring work, and all the little things after moving in, which also add up.

Thanks already for the answers.

I will ask again about the construction costs, thanks for the hint.

We had a parallel conversation at a local bank and I am a bit unsure.

Three "options" were presented (all still include KFW 124, which I left out for comparison because it had the same conditions in all three variants, so it is "only" about €272,000 in the calculation):
1. pure annuity loan with a repayment rate of 2% and an interest rate of 2.1% (2.14% effective) - installment of €1050 (~29 years term)
2. a prepaid building savings contract with 2.28% effective, the first 15 years ~€1104, then ~€1300 (term ~26 years)
3. Wohnriester building savings contract with a combined annuity loan with an installment of ~€1040

I somehow had the feeling that the advisor really wanted to sell the Wohnriester first, then the building savings contract, and "only if necessary" the annuity loan.

He then calculated that with your pure annuity loan it would cost ~€375,000 with an interest increase of 2% after the fixed interest period.
The building savings contract ~€360,000 and the Wohnriester (with estimated taxation in old age, tax advantage) ~€322,000.

Wohnriester has already been discussed enough here, somehow we are very unsure whether the taxation in old age will remain as it is and whether the tax advantages won't eventually be abolished), so that probably rules it out for us.

I am more interested in the comparison of the other two variants:

With the other two I have the feeling that somehow "apples and oranges" are being compared. On the one hand, the installment for 1) is set lower than for the building savings contract and also the increase after year 15 is not considered. I tried to simulate this in an online calculator with the corresponding installments and came to a residual debt of ~€70,000 after 20 years. Even if you then keep the installment of ~€1300 and the interest rate has risen to 8%, I come to a similar total amount for the building savings contract.

What sense does the building savings contract still make, with which one is (as I understood it) less flexible in case one has to sell?
Or do I have a thinking error in there?

The advisors receive significantly higher premiums for a building savings contract than for an annuity loan, or rather, with a building savings contract you conclude both: loan + building savings contract.

Regarding the costs, you really should look closely. However, it is important to pay comparable installments; otherwise, the longer term is more expensive because repayment is slower. The effective interest rates are relatively similar, so you don’t necessarily have to say the building savings contract is out. With an interest rate fixed for 20 years and a remaining debt of €70,000, the interest rate risk is also very manageable. It might make sense to also have the interest rate calculated for 15 or 30 years. This might also be interesting if, for example, you can repay somewhat faster with 15 years. Ultimately, it is always the case that longer interest rate security costs more. Everyone has to decide for themselves what that is worth.

Regarding the building savings contract: What I didn’t know or consider before is that you have to look closely at the flexibility here. If the installment is already tight, you have to be careful:
1.) Usually, it is calculated so that allocation takes place within the fixed interest period of 15 years (sometimes 10), usually 1-2 months before. Of course, you can reduce the savings rate in an emergency, but then the allocation is delayed and the fixed interest period has expired. You then have to pay interest on the entire loan amount (since not a penny has been repaid yet), which may be significantly higher. This can be really costly if you have to bridge 1-2 years. You also don’t get really good conditions because you are more or less tied to the bank (full loan amount, but the house is not worth as much as when newly built, building savings amount is tied up). Here you have exactly the interest rate risk that you actually wanted to avoid with the building savings contract.
2.) After the allocation, there is a minimum installment. If you cannot maintain this either, it also becomes very difficult. If you’re lucky, you can extend the term, with subsequent interest rate risk. In the worst case, you have to refinance (at the current interest rates then).

I would only enter into a building savings contract if I am sure that I can pay the minimum installments at any time in both periods. Otherwise, I pay for a fictitious interest rate security that is not given in reality.

The advisors receive significantly higher premiums for a home savings contract than for an annuity loan, or rather, with the home savings contract you conclude both: loan + home savings contract.

Can you please substantiate "significantly higher premiums" with numbers? And does this apply to every advisor? I also ask for evidence here.

Otherwise, it is just nonsense.

I would only enter into a building savings contract if I am sure that I can pay the minimum rates at any time in both periods. Otherwise, I am paying for a nominal interest rate security that does not exist in reality.

I have an offer where I can make a full special repayment after allocation if the interest rates at that time are lower than the guaranteed ones from the building savings contract