Kfw 124 + annuity loan or pure loan

Hello dear house-building forum.

We are currently facing the decision whether to use the KFW 124 home ownership program or not.

Option 1:
€280,000 loan over 20 years with 2.40% nominal interest rate €1,100.00 monthly installment

Option 2:
€200,000 loan over 20 years with 2.40% nominal interest rate €600.00 monthly installment
€80,000 Kfw 124 over 10 years with 1.97% nominal interest rate €500.00 monthly installment

The second option comes out slightly better overall, provided there is no nasty surprise in 10 years with the follow-up financing of the remaining ~€47,000.

The first option feels "safer" to me. Also, more special repayments are possible there.
Maybe you have one or two points in favor of one side that we haven't considered. I would be very grateful for any opinion :-)

The second option turns out slightly better overall, provided there are no nasty surprises in 10 years when refinancing the remaining ~47,000€.

To me, the first option feels "safer." In addition, more prepayments are possible there.
Maybe you have one or two points that speak in favor of one side that we haven’t considered. I would be very grateful for any opinion :)

No. There isn’t. Security costs money. Prepayments are normally not made (long-standing experience in a real estate bank) – you just intend to make them.
How high can the interest rate rise after 10 years for you to be better off with option 2?

In the end, it is your personal feeling whether the security is worth the price for you, or whether you are "gambling" and in the worst case end up paying more.

No. It does not exist. Security costs money. You usually don't make special repayments (many years of experience in a real estate bank) – you just intend to do so. How high can the interest rate rise after 10 years for you to be better off with option 2?

In the end, it's your personal feeling whether the security is worth the price to you or whether you "gamble" and, in the worst case, pay extra.

Exactly! And if you plan to save the remaining amount, you are misusing it.

If you want peace and security, take the loan with 20 years. One thing is certain, inflation doesn't hurt there :)

It is a bit tricky to enter the combination in the FMH term comparison, because with €500 you would repay the €80k in less than 20 years. It now shows me a follow-up interest rate of 4.8% for 10 vs 17 years. So you are about the same, or equally bad, at around 5% with both options. The risk that you will really lose out here is relatively low. If we have interest rates of 8-10% in 10 years, then inflation was anything but temporary and the debts are not worth much anymore. One point I would also consider is that with €50k you don't run into open doors and often pay surcharges under €100k. In this respect, option 1 would be better.