Is the financing feasible?

Hello twista, what came out of your considerations and calculations? We have a similar concept and are currently thinking about whether it makes sense to include the KfW in the annuity loan (100 TEUR, 1.89% nominal, 15 years, thus 150 TEUR with KfW).

We will probably not take the KfW, as we would have to look for new financing for the remaining debt after 10 years. According to the latest offer from the bank, we would save about €4,500 in interest if we took the KfW. Sure, you would save interest, but instead of saving up the remaining debt or paying into a building savings contract (so that you have no risk in 10 years), I can use this money for special repayments and thus also save interest. This way, after 15 years I have one block that needs to be refinanced and not a small part after 10 years and a larger part after another 5 years.

: have you guys thought about anything else regarding the RS in 15 years, or are you just going for special repayment?

The financing is feasible, however, I do not understand what the building savings contract is supposed to achieve and why KfW is supposed to be waived.

The remaining debt of the KfW after 10 years can be secured via a building savings contract, i.e. the remaining debt is repaid at 2% with the purchased building savings loan (the rest is building savings credit, but at least it is interest-bearing at 1%) after 10 years. Building savings contract interest credit – if it was chosen sensibly – 1%!! This in turn means that the payment interest is not much more expensive than the investment interest in the building savings contract, thus only a slight loss in repayment. The profit lies in the secured follow-up financing at 2% building savings loan interest.

If interest rates are low in 10 years, the building savings loan can be waived, and half a year later the entire financing – including the portion fixed with a longer fixed interest period than 10 years – can be refinanced according to Building Code §489.

Regarding the other component, I would definitely not be willing to pay 2.9% interest for 15 years (which is anyway much too expensive an interest rate) in order to then simultaneously get 0.15%-0.25% investment interest on my repayment capital. The marginal interest rate compared to an annuity is then far too high for it to make sense compared to an annuity loan. Of course, this is only relatively too high since we do not know where the interest rate will be in 15 years. By this I mean that today I would not be willing to minimize the risk with a marginal interest rate of around 4% for an annuity. I would rather consider an annuity loan with at least a 20-year fixed interest period, where the mixed interest rate on a 100% financing never lies at 2.9%. It would also have to be questioned whether the LBS contract will even be allocable in 15 years. If it is, the repayment portion would be far too high, since the interest loss would be even greater, because the repayment portion is fixed at 0.15% whereas I pay 2.9%. If it is not, everyone must ask themselves what this building savings contract as a deferred repayment component should be for now!!

By the way, there are all kinds of nice advertisements flying around here, including banks that currently offer 15 years (if I actually want this at all) annuity loans at nominal 2.2% at 100% depending on the area. If I combine this condition with the deferred repayment variant desired with the F60 tariff of Signal Iduna Building Society instead of the Sparkasse with the poor LBS tariff, it could work; however, fundamentally the question remains why not annuity repayment with a longer fixed interest period and integration of the KfW component with the interest rate hedging instrument – but with a selected tariff on the market – building savings.

we will fully rely on special repayments, I spoke with my wife and she agrees that we will use the special repayment, and when two people agree, I think it will work out, especially since in 15 years we will have little remaining debt and the conditions, even if interest rates rise, can't be that bad (I think & hope so)

: with the extra repayments you planned, you'll easily get below the 60% loan-to-value ratio in 15 years with the follow-up financing

You can always readjust when you see how the world turns

But also consider your life planning when thinking about your special repayments. In the first 2 years in the house, you will probably repay less and instead invest the money in the house. Then your little children will arrive, and it will probably become even harder to make special repayments. Depending on whether you want to have your children all at once or not, special repayments might not be possible for the first 6 years. I haven't even mentioned a wedding here (I believe you are not married yet?). So calculate the whole setup carefully under these conditions!