Is a building savings contract with a high outstanding debt sensible as partial security?

Dear community,
I would like to get your opinion on the topic of [Bausparvertrag]. I know this has already been discussed here from time to time, but mostly with manageable outstanding debt.

In 2020, we got a really good interest rate, but unfortunately, it was only fixed for 10 years. The surcharges for longer terms were relatively high, and at that time the interest rate turnaround was not yet in sight. I am aware that this was not smart from today’s perspective, but it can no longer be changed.
We set the repayment rate relatively low because we preferred to use the remaining available money for special repayments. Also as a safeguard, in case something unforeseen happens.

Total loan amount: 770,000 euros
Divided into three parts:
- Annuity loan through the bank: 530,000 euros - term 10 years - repayment 2% - interest rate 0.55%
- 2x [KfW] loans (based on 2 residential units): 240,000 euros - term 10 years - interest rate 0.95% (+ repayment subsidy 36,000 euros)
For the bank loan, a special repayment of 25,000 euros per year is possible.

Outstanding debt after fixed interest period: presumably approx. 570,000 euros.

Now the fixed interest periods will expire in 2030 and we would have to refinance at the then current interest rate. No one knows today what it will look like in 2030.
The bank offered us a [Bausparvertrag] from [LBS]. I know the reservations and costs for a [Bausparvertrag], but I would still like to hear your opinion.

Building society: [LBS Südwest]
[Build savings tariff]: [ZukunftPlus]
Credit interest rate: 0.01%
Contract fee: 1.6%
Nominal interest rate: 1.19% (effective 1.54%)
Repayment rate: approx. 1,000 euros

Total costs (including interest): approx. 7,000 euros.
During the payment phase, various models were proposed to us, either with monthly installments or annual payments.

The idea would now be to secure a part of the outstanding debt (e.g. 200k€) via the [Bausparvertrag] with the interest rate of 1.19%. The remaining amount would then be financed at the future interest rates.

We could come up with the 25k€ special repayment per year through our salaries. If we calculate conservatively with 20k€, three variants would emerge:
1) Special payment into the loan -> I reduce the outstanding debt by 140k€ and then finance 430k€ with the future interest rate
2) [Bausparvertrag] -> I could secure 200k€ (or 55% thereof) with 1.19% interest (costing me approx. 3.2k€) and then finance 370k€ with the future interest rate
3) Investing -> Would generate approx. 20k€ "profit" with very positively calculated 5% interest. With this I reduce the outstanding debt by 160k€ and finance 410k€ with the future interest rate

What is your opinion on this? Have I overlooked something?
And are there currently better [Bausparverträge] on the market compared to [LBS]?

Thank you for your answers.

I would be in favor of investing.

The disadvantage of the special repayment: the interest rate of 0.55% is currently well below the market. If you now repay money on which you pay 0.55%, you would even suffer a huge economic loss compared to a low-risk fixed-term deposit investment at 3%.

The disadvantage of the building savings contract is that while you secure the good interest rate of 1.19% for part of the remaining debt, you will "invest" money at 0.01% every year for the next 7 years (to get that part eligible for allocation), which you could invest at significantly better returns. You have to take this into account in the calculation.

1) and 3) in the proportion 25-50/50-75 would be my suggestion. It would depend on which investment strategy you would consider for the max. 7 years. I consider the building savings contract to be the worst option.

Even if saving up and the 410k remaining debt work out, that would be over 16k in interest per year at 4%. So I couldn't sleep peacefully anymore.

The high loan implies a high income. That the 25k special repayment per year can also be saved shows that the 4% interest is payable later. I wouldn't lose sleep over that.

Definitely invest the money first. Put half of it more conservatively in fixed deposits, the other half somewhat riskier. The stock market is currently a bit volatile and seven years is a short period. The next crisis will certainly come.

due to 2 residential units

oh yeah, how about raising the rent ;)