Please help with construction financing!

Hello everyone,

I am building a Kfw 40 house and will take advantage of the subsidies for 2 residential units amounting to 200,000 EUR here. The interest rate is 0.75% for 10 years, and 1.3% for 20 years. The bank offers me to handle the first 10 years via a building savings contract (closing fee 1% of the loan amount) with a KFW loan (0.75%) and to secure interest of 1.8% for the following 10 years, thus repaying the remaining amount of 90,000 EUR after 10 years (repayment + interest approx. 1,000 EUR per month). What do you think about this? Should I process everything through Kfw with 1.3% interest over 20 years or accept the bank’s offer and fix the interest rate at 0.75% for the first 10 years and 1.8% for the following years? In variant 2 with the bank, part of the repayment must go into the building savings contract from year 2 to secure the interest rate for me.

I am very grateful for any suggestions, concerns, and opinions!

Many thanks in advance!

I haven't dealt with the KfW loans for a while now.

200 TEUR subsidized loan via KfW for 2 residential units
Are there regulations that the KfW153 is granted with 100 TEUR per residential unit under certain conditions (e.g. Kfw 40 house)? I have only ever known about 50 TEUR.

If the KfW153 is also granted with 100 TEUR/residential unit, then the following part becomes obsolete. Otherwise, please note:
For the KFW 153 you probably want to take out the KFW 124 as well.
However, the KfW 124 is only granted with a maximum of 10 years fixed interest.

Since 01.04.16, there is [100000€] per housing unit at KfW. But a few details are still missing to assess this offer: how high should the installments be? For the KfW loan and the building savings contract in the savings phase? On the KfW homepage, there are repayment calculators where you can see how much interest you pay and what balance remains. For the 10-year KfW term, you then have to enter the remaining balance into another repayment calculator at 1.8% and get the interest costs there. Then add both interest costs and the building savings contract closing fee together. Then you can see how much interest you paid with which variant.

Hello, just to make sure I understand you correctly. You are building a KfW40 house with 2 residential units and only need 200,000 €. Then I would simply take out the KfW loan 153 for 200,000 €. Term 20 years, fixed interest rate 20 years, installment 990.45 euros. Interest costs according to KfW repayment calculator 23,161.79 minus 20,000 € repayment grant makes just over 3,000 € loan costs effective loan costs :)

The question remains, how much is the whole project supposed to cost? Surely more than 200,000 euros. Where and how do you want to finance it? With equity?

Keep in mind that you only get the 20-year loan at 1.3% if it is fully repaid in 20 years. Just take a look at the KfW page, there are repayment calculators also considering repayment-free initial years. 200,000 euros at 1.3% should then amount to around 700 euros per month.

First of all, thank you very much for the answers!

I'm really only interested in the 200K EUR. Whether someone has experience with the combination of KFW and building society savings contract (or possibly even a Riester-subsidized building society savings contract) and can recommend something like that... What are the advantages and disadvantages? Or is it better to stay away from something like that?