Is it sensible to withdraw Riester capital to increase the equity ratio?

Hello everyone,

I have now heard several opinions on the topic of withdrawing my Riester capital. Specifically, it concerns €14,000 invested in a fund-linked Riester contract and €7,000 in a classic Riester bank savings plan (partner).

The house bank recommends: putting the capital into each a Wohn-Riester and then including this in the financing. (We have 3 children).
Financial advisor 1 recommends: leaving the capital invested due to unknown deferred taxation in retirement and financing with less equity.
Financial advisor 2 recommends: withdrawing the capital, letting the contracts rest for now, and using the capital to increase the equity ratio in order to get a better interest rate with a classic annuity loan.

Equity ratio without Riester: approx. 14%
Equity ratio with Riester: approx. 18%

And: yes, I know 20-30% equity would be better.

What do you think?

Oh, the thing with deferred taxation is nonsense. Sure, you have to pay tax afterwards, but you actually receive significantly less pension than previous income. We will probably not even reach the tax exemption limit with the pension including (!!) the subsequent taxation of the homeownership promotion, where you have to pay taxes at all, so the subsequent taxation doesn't interest us at all. However, the homeownership promotion brings a tax advantage of several hundred euros until retirement, which we have AVAILABLE NOW. So you should calculate more precisely and not be prematurely scared off by buzzwords like "deferred taxation."

I would withdraw the capital and include a homeownership promotion loan (not a building savings contract!!) for each partner. In any case, there have to be two separate homeownership promotions, since two people cannot pay into one together (or rather, one can pay in, but for allowances, each needs their own). Then up to 4,200 euros per year can be tax-free. The normal repayment already counts as a contribution, so it doesn't get any easier to reach the maximum tax-free amount, since you repay quite a bit anyway. As I said, I would have the deferred taxation calculated based on the pension notifications. And don't forget: money you have available today is worth significantly more than "the few" taxes you might have to pay in 30 years.

Of course, this does not apply to high earners.
By the way, deferred taxation is not so unknown, you can calculate that.

Even if we hypothetically assume in the best case that the purchase price (or production cost + land) corresponds to the collateral value of the bank, the loan-to-value ratio is 82% or 86%. There are exactly two "magic thresholds" at which the conditions improve drastically. One threshold is at 80% of the CV, the other for real estate loan conditions is at 60% of the CV. Some banks do subdivide the scale a bit more finely, e.g. 50%/60%/70%/80%/90%/100%/110% of the CV. And in relation to "really expensive," it is generally over 80% of the CV. And you will almost certainly fall into this category. Therefore, there is no advantage in terms of conditions like "paying less interest."

Do you know the actual loan value of the property that the bank uses for the calculation of the conditions? Without this factor, it is futile to consider whether you might scrape together another 5,000 EUR to finance at 10 basis points cheaper.

But of course, it is always advantageous to pay interest on less borrowed money. From the perspective of the question "How much interest will I pay in total over the next 30 years," it is obviously always worth (if no more profitable investment exists) to pay off the loan faster or not to take out such a high loan in the first place.

Whether you have 14 or 18% equity is more or less irrelevant to the bank.

As others have already described here, it is somewhat difficult with the follow-up taxation. The Wohnriester makes sense, but in this case the consumer must calculate very precisely how much savings they actually have. It is always generalized that users can pay off the loan up to 2 years earlier because of this....but in reality, it looks a bit different.