Opinions on the financing offer

Hello,

we have received the following offer from a local bank for our project (single-family house total costs including land 470,000 euros, of which 170,000 is equity) for the amount to be financed of 300,000 euros.

200,000 at 2.28% with an initial 1% repayment fixed for 10 years, special repayment 10% annually
50,000 at 2.7% as a full repayment loan over 20 years
both loans 12 months without commitment fee

50,000 KFW funding at 0.9% over 20 years, 10 years fixed interest period

results in a monthly rate of 1,061 with a net income of 3,500 euros.

I am grateful for opinions!
regards
Markus

Too little repayment for this amount. Especially because the interest rates are astronomically low.

More repayment would probably mean various restrictions with that income.

Have it calculated with:
150,000€ / 20 years full repayment
100,000€ at 1% repayment
50,000€ KfW

I don't know in detail what changes the bank applies to the interest for you, but this way you could take a lot less risk after 10 years for the (according to your information) large remaining debt. You would only have to calculate with the remaining debt of 100,000, not with that of 200,000.
You can also extend the KfW loan to 30 years if needed. With that amount, interest rate changes (almost) don't hurt. Better to invest the money in the "chunks."

That way, your loan will probably be about 200€ more expensive.

If that doesn't work for you, then take a look at the remaining debts in your current calculation. After 10 years still over 175,000€.

Then even a small increase in interest rates quickly hurts the wallet. At 4%, already about 740€/month. And that's only with continuing 1% repayment which means a further term of about 40 years. Almost 1100€/month if it then becomes a 20-year full repayment loan. Plus the additional costs with higher interest for the KfW.

So if you want to have paid off your house in this lifetime, it is recommended to already put a little more money into it now.

But to each their own, I always say. :)

Thank you for the answer. Initially, I had exactly the same concerns. However, since we have a condominium (110 sqm) that will be paid off in 10 years, as well as various life and pension insurances, I am somewhat reassured. For this reason, we agreed on the high special repayment.

If you don't bring a large inheritance or a significant salary increase as an addendum now, I find the offer nonsensical.

After 10 years you will have a €200K loan and the €50K loan, where the fixed interest rate period expires. Until then, with 1% repayment, hardly anything will be repaid. I would go for at least a 15-year fixed interest period here. Presumably, your desired rate will be the problem.

I understand the €50K full repayment loan even less? If the majority of the financing is designed with a 10-year fixed interest period, then do it properly and repay and make special repayments as much as possible.

The financing is pretty tight, and with your variant it will be decided after 10 years whether you are allowed to stay in the house or if you have to move out. Usually, you calculate €500 rate per financed €100K. Maybe you should reconsider to what extent some costs can still be reduced.

My answer overlapped with yours.

With an income of 3500, from which possibly another loan still has to be repaid, I find the financing as already stated here to be nonsensical for us. Calculate the worst case for yourself, what you will then have as a remaining debt after 10 years.