Opinions on financing offers

Hello,

We have determined the construction costs, loan offers are available and are, to our taste, good but very different.

First about us: Very secure jobs, children planned, 4.8k net with collective wage increases in the coming years (for example, 25/month alone in two years), early 30s.

Construction project: Single-family house, building plot paid with equity, some reserves available, construction with a larger construction company (50-60 single-family homes p.a.), soil survey and preliminary sampling carried out. Financing requirement 447,000.

About the offers:
We could choose between one from our savings bank, which offers us a 15-year loan plus a building savings contract. In terms of total interest, it is the cheapest with 97,000 (including all costs), but the installment in the first 15 years with 2,100 is quite substantial, after 15 years 1,750 for the remaining period via the building savings contract. Option two is 1,900 with total costs of 110,000 (25 years full repayment) with the option of repayment change or repayment stop for 24 months during parental leave. Option 3 would be 1,500 with special repayment option and repayment change to 25 years with remaining debt of 113,000 at 130,000 costs – but if we consider about 250 per month for special repayments on average, it would be repaid before the end of the fixed interest period and the costs would be correspondingly lower.

We are leaning towards option three because if interest rates rise during the long term, you can invest the money instead of repaying it at 2%, 3%, or 4%, as was possible a few years ago with conservative investments, and repay the loan with a profit at the end.

But your opinion is requested: What would you choose, also with regard to possible parental leaves?

you will probably have a child in the next few years and not in 15 years would also tend towards option 3, once the second income is back you can still increase the repayment.

Hello,

I would be interested in the interest rates. For 1, 2 or 3, here it is like comparing apples and pears. If you compare 1 and 3, you would have to fairly calculate the interest down so that in model 3 you also come to the installment of 2,100 and then 1,750 €. Especially in the first years it is not saving 250 € but 600 € plus special repayments (2,100 vs. 1,500).

Did you only inquire at the Sparkasse or also with brokers? I agree with Emeda, the children come faster than you think, it could get tighter and you might skip the special repayment. Especially in the first years people tend to skip it. I prefer to start higher and then use the repayment rate option if it gets tight.

Good morning,

unfortunately, I cannot say anything about the detailed offers (I still lack the experience so far), but I would still have a veto on the planned installments.

Are you sure that with a combined income of about €4800, despite possible linear increases, you can repay a monthly rate of about €2100-1500? Suppose children really do come along, then the thought really makes me uneasy.

Regards Andreas

So we are financing 400k.
2x €50,000 KFW - term 10 years (this is a bit different today), special repayments possible
€146,000 - term 10 years, no special repayments
€156,000 - term 10 years, no special repayments
€50,000 home savings contract - made immediately allocatable with equity, replaces a loan
another home savings contract monthly €568 - allocatable in 10 years, replaces the other loan
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Total monthly repayment = €1420

This way we have short loan terms with low interest rates but with fixed interest until the loan is paid off in 26 years.

The only uncertainty is the remainder of the KfW loan. That is about €80,000 (without special repayments), which remain after 10 years. We then have to refinance them.

Assume that you will not make many special repayments in the first 2 years. If children come along, even less so.

By the way, the savings banks gave us the worst offers. Deutsche Bank and Commerzbank were the best.
And calculate on paper how much interest you will pay in total during the repayment. For us, it easily amounted to €8,000 interest due to the different loan models.

Thank you for the first opinions.

So, the interest rates are:

1. Sparkasse loan 15 years, 1.41%, installment 1,400, plus building savings contract 350 during these 15 years as well as an additional 4,250 for this building savings contract, to get it to the desired level for coverage after 15 years. When this is achieved, the installment afterwards is 1,750 for 14 years. Total costs including building savings contract closing fee 98,000. We are considering whether it is realistic to manage these actually necessary special payments – clearly, in the current situation it would be feasible, but what about parental leave(s)?

2. Allianz full repayment loan (via Interhyp), term 25 years, installment is rather 1,860 at 1.79%. In case of children, Allianz grants a repayment suspension/reduction of up to 24 months, also a small premium of 500 repayment subsidy. Repayment changes between 2%-4% possible, however Allianz can then cancel the full repayment discount (0.15%). No special repayment option.

3. Ergo (via comdirect), fixed interest period 25 years, installment 1,500, interest rate 1.82%. Special repayment up to 5% p.a. possible, repayment change between 1%-4% twice free of charge, thereafter a flat rate of 100 applies. Remaining debt without any special repayment 113,000, interest costs without any special repayment 130,000.

We have inquired with: two Sparkassen, Spardabank, Interhyp and comdirect (probably double), and BW Bank. Is there perhaps another hot tip for our financing situation?