Once again, opinion on the financing offer requested.

Stupid question but isn’t the house tied to something? You do know that the co-owner of a land charge has to agree. The problem with possible care would also have to be clarified. We deliberately avoided such constellations and preferred to pay a few xx more behind the comma.

It would also be interesting to know what your monthly net income is under the conditions as well as the outstanding balance of the two loans.

The net income amounts to €4,000 and, in my understanding, has little influence on the conditions. Rather, it affects the decision whether they will finance us at all with such a rate.

The outstanding balance of both loans would be as follows:
Allianz after 20 years = €56,250
KfW after 20 years = €38,641

After the 20-year interest rate lock-in period expires, we will be 53 years old.

However, it must be considered that in this repayment plan we assume that we will begin repayment only between July 2017 and September 2017.

Provision interest would have to be paid from May 2017, but it should remain limited because, according to my estimates, by that time according to the payment schedule (prefabricated house) including earthworks and house connections, about 75% of the amount will already have been drawn.

In the end, only the drawdown for materials for own work (floors, ceilings, walls, outdoor facilities) will be missing.

We will probably not draw down the loans evenly but concentrate on one of the two so that we can at least start repayment early on one of them.

Regarding the land charge in the family property, neither the parents-in-law nor the sister have a problem with it, but the more I think about it myself, the more I am willing to pay maybe €5,000 more interest over the term rather than complicate the situation and take risks.

The land register of this family property also contains residence/living rights of the parents-in-law as well as the great-grandfather.
Also, there is a land charge of €90,000 from another bank, of which €17,000 is still outstanding.
So maybe it is not as attractive as the advisor wanted us to believe.

In any case, I have now asked him to send us further offers that do not involve lending against this family property.
I estimate that the Allianz interest rate will thereby increase by about 0.15 - 0.20%.
That should amount to around €4,000 - 5,000 over the term.
Since we want to keep the rate relatively stable, the outstanding balance will probably increase.

As for the attractiveness of the Allianz loan... of course, it is a mixed calculation.
I can only say what I saw on the screen with the Interhyp advisor, and Allianz was among the top.

Another offer was from the DSL Bank.
There it was 2.19% and 1.51% for the KfW. So both components were more expensive.

Cheaper was actually only HypoVereinsbank, but the advisor categorically excluded it because he said they would not finance our region/plot location.
We are building in northern Hesse in a rural area without shops and significant infrastructure (land reference value €50).

Whether he of course only claimed this because he gets less commission from HypoVereinsbank than from Allianz/DSL Bank, I obviously cannot say.

Maybe we should inquire ourselves at HypoVereinsbank.

And one more question from my side regarding the termination of contracts with a duration of at least 15 years after at least 10 years....

In such long-term construction financing contracts, you can terminate or possibly partially terminate after 10 years (?).

Is that only one-sided? Meaning if our plans have changed or the interest rate level makes it sensible? Or can the bank also terminate us after 10 years if the interest rates of our contract are too low for them?

And one more question for clarification regarding the termination of contracts with a duration of at least 15 years after a minimum of 10 years....

With such long-term construction financing contracts, you can cancel or possibly partially cancel after 10 years (?).

Is this only one-sided? That is, if our plans have changed or the interest rate level makes it sensible?
Or can the bank also terminate us after 10 years if the interest rates of our contract are too low for them?

You have the right to terminate after 10 years, the bank is not allowed to terminate....

We are also currently dealing with the topic of financing and for us Allianz is also the cheapest provider for a fixed 25-year term.

Best regards

Thank you, won the bet with father-in-law


We now also have the offer from Interhyp/Allianz without the encumbrance of the family property.
It accounted for 0.17%.

Allianz - Main loan

[*]2.17 % effective

[*]20 years fixed interest
[*]20 years term
[*]2.50 % initial annual repayment rate
[*]€666.05 monthly rate

[*]€75,370.77 remaining debt after 20 years
[*]€97,629.23 repaid in 20 years

[*]€53,067.88 interest paid in 20 years

Allianz KFW 153

[*]1.27 % effective

[*]20 years fixed interest
[*]30 years term
[*]2.85 % initial annual repayment rate
[*]€342.73 monthly rate

[*]€35,372.43 remaining debt after 20 years
[*]€64,627.57 repaid after 20 years
[*]€16,492.17 interest paid in 20 years

I’m now pondering whether we should actually accept the offer from Sparda with only 15 years fixed interest?

Sparda - Main loan

[*]1.61 % effective
[*]15 years fixed interest
[*]15 years term
[*]3.28 % initial annual repayment rate
[*]€701.81 monthly rate

[*]€87,485.66 remaining debt after 15 years
[*]€85,514.34 repaid in 15 years

[*]€30,223.76 interest paid in 15 years

Sparda KfW 153

[*]1.51 % effective
[*]20 years fixed interest
[*]30 years term
[*]2.75 % initial annual repayment rate
[*]€354.55 monthly rate

[*]€35,818.47 remaining debt after 20 years
[*]€64,181.53 repaid in 20 years

[*]€19,690.23 interest paid in 20 years

Despite only 15 years fixed interest on the main loan and a non-discounted KfW interest rate, I somehow have a much better feeling.
The interest difference between 15 years Sparda and 20 years Allianz is already huge (0.56%).

The interest expense is after all €20,000 more with only €12,000 less remaining debt.

That makes the first 15 years so expensive that according to Excel, for the missing 5 years compared to the Allianz 20-year option, one could also afford a pretty expensive follow-up financing for those 5 years.

Admittedly, the total monthly rate at Sparda (€1,056.36) is also higher than at Allianz (€1,008.78).
However, the Interhyp advisor did not allow us more than 2.5% repayment with Allianz financing because I wouldn’t be able to manage it with my salary alone. My wife’s part-time position is temporary.
Sparda also offered us higher repayments.
The difference, however, is not exactly huge at €47 when you consider that not the average salary but the lowest salary (still €200 below the annual average) was included in the household calculation, and my wife certainly will not be unemployed permanently if the position does not continue after the temporary period.

One could now recalculate the Allianz financing with a higher comparable repayment.
That would significantly reduce the remaining debt and interest but is actually unnecessary for our decision as we were not offered this option.

I also see little point in enquiring again about 15 years fixed interest at Interhyp.
We had quickly clicked that together during the conversation and the cheaper offer was some savings bank with 1.53% effective. However, there too with the now unwanted encumbrance of the family property.
Therefore, the Sparda offer seems already quite attractive in direct comparison.

Would you, in our situation with the given offers, also ignore the 5 years (expensive) interest security?