KfW70 Credit - when does 1% apply and when 1.25%

However, interest calculation can only be done with a term of 10 years. In the current interest rate phase, a fixed interest rate period of 10 years for a home loan is, in my opinion, not sensible since no one knows where interest rates will be in 10 years and whether you might then have to pay 3, 4, or 5% again for the follow-up financing. It is better to choose a fixed interest rate period of 20 or (if possible) 30 years for the bank loan.

KfW is worthwhile if you want the grace years, which we will definitely include in our financing. Especially at the beginning, you surely still have one or two things that strain your finances. It is nice if at least the monthly burden is relatively low at the start.

A repayment-free period can also be agreed upon with any other regular bank loan. Alternatively, a one-time adjustable repayment rate. Has the same effect.

Mathematically, a KfW financing at 1.0% would still make sense even if I have the money in cash and invest it as fixed deposit for 10 years - or would the interest savings due to higher equity be even better?

This is a calculation example and must be considered individually. The interest condition must of course improve significantly or the loan amount must accordingly be larger. I would not rule out this idea. Calculation gives you the answer. You also first have to find an investment offer > 1% that appeals to you.

In a "normal" interest rate environment, logically there should be no investment offer that is higher than the (non-subsidized) loan interest rate.

If you do not need a loan, there are also grant models depending on the intended use of the equity capital.

It should also be noted that interest income is subject to taxation. There actually has to be a credit interest rate of at least 1.4%, and this is hardly achievable with fixed-term deposits, at least in Germany.

Greek banks might be offering something like that right now ;-)

In the world of interest rates, it was not previously assumed that there would be negative interest rates.

That's why also quotation marks.