Larger loan with only 5 years interest fixation

A different approach...

You are assuming continuing falling or stagnating, but rather not massively rising interest rates (I agree, but that doesn’t matter here). In the first years, you want to significantly reduce the loan amount to then comfortably pay off the rest financially in the long term.

Assuming I have understood this correctly, one could also finance the entire amount with a flexible loan (i.e., without fixed interest rate). This way, your interest rate changes every few months according to the market, which would be relatively easy to handle with a high income. You can additionally repay as much as you want, and if the loan-to-value ratio is within the range you want, you switch to a loan with fixed interest rate. Advantages:
- Special repayments possible anytime and without limit
- When switching to a fixed interest rate, you could even change the bank
- If things go as I hope, in a few years your loan-to-value ratio will be better and the interest rates favorable, so ideal.
Disadvantage:
- Larger interest rate increases directly affect the monthly installments

How do you come up with 150k KfW? I thought the maximum was 100k? Or has something changed?

Probably still a home ownership program...

Then it is clear that you of course take 10 years.

But enlighten us, which repayment rate you are assuming. And don’t come with 2% now.

Edit: It should probably be a repayment rate of just over 6%, right?

I assume that the OP is more certain with 5 years that there will be no massive interest rate increase. The 10 years are probably too uncertain for him, otherwise he would rather consider the 10 years with +0.1%.

Even though I am still satisfied with my financing (it’s been 1.5 years since the conclusion after all), the icing on the cake would probably have been to run the KFW124 as a variable loan, but you only know such things afterwards.

Thank you very much for the feedback.

In particular, I apparently overlooked the point that the estimated property value is not constant but variable. Unlike interest rates, it cannot necessarily be assumed that it will develop favorably. Due to the use of the property, it definitely decreases. That means you would have to rely on rising property prices at this point. This definitely makes the strategy too risky...

Thanks for the note about the variable loan. This is indeed an even better way to implement my approach than the 5-year fixed rate.

I think that I would then probably have to find a reasonable combination loan variant so that I get at least part of it at relatively favorable conditions without a fixed interest rate. If this part is paid off in the first years, the total rate decreases.

Keeping an adjustable-rate loan and Euribor in mind would also be my suggestion.