Outstanding Debt Protection in 15 Years

500€/month x 12 months x 14 years results in 84,000€ in the year 2030 (without interest). The remaining debt in 2030 minus the 84K€ results in a 120K€ loan to be extended. Even with 6% interest and a rate of 1433€, the loan would be paid off in under 10 years. The borrower would then be max 62. Assuming the 500€ is saved every month, I still do not see the risk, and as mentioned above, patchwork wants to secure the remaining risk using a home savings contract. My thing would not be the home savings contract, because I do not expect a massive interest rate increase, but of course that is a matter of opinion.

The L-Bank loan will certainly only be offered as a do-or-die variant in this form. I hardly believe that the loan could have been split. In this respect, his home savings variant is actually a term split. In a split into an annuity loan and a TA loan with a home savings contract, ultimately nothing else is done.

Regarding different terms. My different terms also cause me headaches with every special repayment. I could either make a special repayment on the low-interest 10-year KFW loan so that it is gone after 10 years, or I pay off the more expensive Sparkasse loan. No matter how you do it, you do it wrong. Advantages of the KFW special repayment: - no loan extension worries after 10 years - lower rate after 10 years Disadvantages of the KFW special repayment - higher interest expense - reduction of the maximum special repayment possibility - extension of the term

I do not find the term splitting so great, especially if one might also restrict oneself regarding a bank change.

No, you are the one making the mistake.
Assuming he repays (if he could) €500 more. Savings in the first month 0.75%/12 = €0.31
versus
Deposit €500 in a daily allowance account. Interest e.g. 1% in the first month 1.00%/12 = €0.42

In the example, after 10 years, this results in €790 more interest compared to the interest saved if the amount was repaid directly.

Oh, yes, you are right, I did not calculate it over the 10 years. My mistake.

Still, with such a small interest saving, I would repay more rather than save. Who knows if we won't soon have to pay fees for parked money after all. And then the interest advantage shrinks more and more. If applicable, one might also not be so consistent in saving, so that in the end there is more outstanding debt than planned. And then there was also the question of age, which was answered with 38 years. The original poster is getting close to retirement age and then has not much time left to save after the mortgage. In about 25 years, a few things might also break down that reduce the savings amount again and push the final payment further back. But that is just my personal opinion. Everyone can of course do what they want.

500€/month x 12 months x 14 years results in €84,000 by the year 2030 (uninterest bearing). The remaining debt in 2030 minus the €84K results in a loan of €120K to be extended. Even with 6% interest and a rate of €1433, the loan would be paid off in under 10 years. The original poster would then be max. 62 years old. Provided the €500 is saved every month, I still don’t see the risk and as mentioned above, patchwork wants to secure the remaining risk via a building savings contract.

If you achieve a return of 3% on the open market (stocks or similar), after 14 (15) years about €24K (€27K) more capital would be available. That is €24K (€27K) that you would have to refinance less. This (!) counter calculation (or the one with the alternative loan, which we still don’t know) needs to be done - what happens if the OP even achieves 4, 5 or 6 % (with the corresponding risk, yes) can be calculated on a beer coaster.

My thing would not be the building savings contract, because I do not expect a massive interest rate increase, but of course that is a matter of opinion.

Exactly. The building savings contract is a high-security product to secure another high-security product. Which ultimately leads to really long loan terms; that means you pay little interest, but up until just before retirement. And when you pay small interest over a long period, that adds up over the term. Well, ultimately everyone has to decide that for themselves, but I think it’s legitimate to present the other point of view.

The L-Bank loan will certainly only be offered as a do-or-die option in this form. I hardly believe that the loan would have been splitable.

Exactly. And right there you should ask yourself why the bank acts this way? Or from their point of view even has to act this way?

Um... Actually not - this "breaking point" is supposed to be counteracted by the building savings contract. I actually assumed that a building savings contract is a product everyone understands. But gladly again slowly: I do not have to refinance at the then current conditions, because I could fix the conditions (1.25%) now already.

Yes, but you can only fix the conditions of the building savings contract now. And you have to do that now and thereby commit yourself to the construct for 22 years. Especially since you’ve only gotten into this situation by deciding to go for the L-Bank loan. However, if you were to achieve the above-mentioned 3% and refinance on the open market, it is not unrealistic that you would be debt-free much faster. Alternatively, one would have to calculate how many years sooner you would be finished if the repayment was higher in the first 15 years with the "free" loans.

And what it means to have 12*€1433 free per year...

But well, that’s ultimately more a mentality issue, you are obviously more the type for the super-secure option.

Best regards Dirk Grafe