Pre-finance TA loan or take it from equity?

Hello,

we have taken out a TA loan for our construction financing with a building society. Unfortunately, we did not realize that the savings rate takes full effect from the first EUR loan drawdown. Thus, we have an overlap of savings rate and rent for about one year.

We now have the option to pre-finance the TA loan through the bank with a bullet loan. The interest amount for one year would be exactly 3,000 euros.

The alternative would be to pay the rent from our reserves for one year. The reserve is 26,000 euros, of which 10,000 euros are intended as a buffer for the house construction itself and the rest for the period after the construction. By paying the rent in parallel, this reserve would shrink by 6,000 euros.

Additionally, after the construction, we want to have another child, which will cost us about 200 euros monthly in income.

Do you mean by TA a fixed-rate mortgage with building savings backing? Do you only have this one component, i.e., no repayment mortgage or similar as additional components, so that the fixed-rate mortgage only needs to be "touched" later? Otherwise, it is quite clear that to meet the allocation date, the savings must be made regularly and in full amount from the beginning. For that, you have a uniform annuity over the entire term (often over 30 years) and a special repayment right at any time after accepting the allocation loan. Often not bad as a component of financing, but as overall financing? Well. Are you still within the withdrawal period so that you can restructure the financing?

It has meanwhile been settled, we have done the pre-financing. Yes, with TA is meant deferred repayment with the building society. Effectively 2.0% over a total term of 30 years. The surcharge to cover the interest rate risk was worth it to us.

Effective 2.0% over 30 years including the right to make special repayments after allocation is not such a bad rate at all. Especially since you can even lower the effective interest rate with special repayments after allocation (I assume that the home loan is significantly above 2% and the FH correspondingly significantly below 2% interest).

Yes, that is correct. 1.4% for the advance loan and 2.85% for the building savings contract (building savings loan).

However, it was also a special loan program that has since expired.