Our financing offer

Well, I mentioned everything the guy gave me. I don’t have any more data.

No interest rate? Or did I just miss it somewhere.

Regarding the building savings contract: here the bank advisor must tell you, in addition to the amounts, how high the follow-up fee is (often 1%) and the annual processing costs (often between 10 and 30€).

As you have already correctly understood, after the allocation (in your case after 11 years) you will repay the bank loan of 232,000€ through the building savings contract. You have already saved a little over 80,000€, the rest you now have to pay back to the building savings contract. This is of course not interest-free, but like with the annuity loan, the sum is interest-bearing. The advantage of the building savings contract is that you already know today the interest rate of the entire sum. This is quite significant, because if, for example, 5% is stated there, it would only be worthwhile if in 11 years the interest rates are significantly above 5%. After the allocation, there is also a premium on top that has to be paid additionally. Also something in the four-digit range. Only with these figures can you make a comparison. Based on your numbers, I had calculated an interest rate of about 3.5%. That is not really good.

Regarding the interest rates, the bank advisor has misled you somewhat. The interest rates apply only to the bank loan over the first 11 years and the KFW loan over the 20 years of interest certainty. The remaining sum is of course not interest-free and the interest on the building savings loan he also omitted. So several tens of thousands of euros come on top of that again. From my point of view, the offer is therefore not serious because he did not tell you important things. I would not want to conclude there. If he then comes to you with the argument that you do not have to accept the allocation if the interest rates in 11 years are lower than agreed in the building savings contract, then he is basically right, but then you pay considerably more for the 11 years than with a pure annuity loan.

My opinion: it is certainly possible to set up a good financing with a building savings contract. But it always depends on the details. If you do not understand the construct exactly, you should keep your hands off it. You should always know in your financing what options you have in which situation. If you do not even understand the system, it makes no sense. What happens if you want to reduce the rate? What if you want to make special repayments (in which of the 3 building blocks)? Can I extend or shorten the financing?

I can only agree with most of the previous speakers. A few weeks ago, we finalized our great consultation at Interhyp with a loan agreement at a large German bank. Before that, we had obtained offers from our insurer / building society. The offers with the building savings contract were not necessarily bad. However, I believe that your personal situation has to be perfectly suited for it to be worthwhile compared to a pure annuity loan.

My conclusion from many consultation sessions and thousands of thoughts:

A loan with a building savings contract may be safer, but it is often inflexible like a rock. Especially when it comes to temporarily reducing the monthly burden. For that, annuity loans are in my opinion much better suited. If you are ever in the happy position of not knowing what to do with your money, special repayments are enormously important and efficient.

Looking at your "situation" (as far as one can interpret it from the few tiny bits of information), you should always be aware of possible unemployment, family planning, illness, and that you may sometimes have less money available per month than currently.

Therefore, we decided not to buy security in terms of fixed interest rates (I also see 30 years as unnecessary) but security in terms of flexibility.

If you feel that you don’t understand 100% what someone is offering you, then definitely ask again. And if it has to be explained 2 or 3 times. If it’s an honest and reasonable financial advisor, then he will be able to explain it to you and find the product that fits you.

Good luck with it!

Hi, today after many days I finally received a reply to our email in which I asked the broker if he has a current offer with the additional €25,000. Here is the response

Dear Mr. H......,

I have calculated several variants and come to the conclusion that a rate of €1,300 is too low to securely establish the financing.
If you do receive an offer from a competitor that suits you, you should definitely send it to me for review.

If you have any questions, I am happy to assist.

Kind regards

Michael G.....

Hello???? What's going on there?

I don't know exactly who you are with and who you are getting advice from. In addition, I would not only pay attention to monthly installments but also to repayment rates and durations. Beforehand, one should set an absolute upper limit for the monthly burden and then find a product that fits accordingly!

If this is the entire content of the email, I find it very weak. Maybe get advice from other financial advisors? I have had very, very good experiences with Interhyp, although I believe it is also a bit of luck who you are dealing with there.

Hi, yes we are also in contact with Interhyp. Also with Hüttig & Rompf. Yes, that was the whole email. Really weird. First it works and after 22 years it’s finished and suddenly because of 25k more it suddenly doesn’t work anymore. We also pay less attention to the rate, but we have always said a maximum of about 1300€.