Precautionary loans and annuity loans building saver

Hello ladies and gentlemen,

perhaps some of you have advice on whether the following financing offers are within the expected range. At least so far it is the best offer.

Construction volume (house from the builder, land, garden and ancillary costs): €250,000
Equity: €40,000 (incl. land)
Financing requirement: €210,000
Installment ~ €900

I received the following offers from a bank:

Provision loan: €120,000
Nominal interest rate: 2.95%, effective: 2.99%
Repayment: 2.55%
Fixed interest period: 25 years
Installment: €550

+

Annuity loan: €900,000
Nominal interest rate: 2.2%, effective: 2.22%
Repayment: 2.5%
Fixed interest period: 10 years
Installment: €352.50

Certainly, the 10-year loan is the risk area, however it is possible for me to make special repayments there.

Regarding my questions:
1. Do you think the offer is okay under the circumstances?
2. Does it possibly make sense to repay the provision loan less at the beginning and increase the repayment on the annuity loan to reduce the remaining debt a little?
3. Alternatively, I have an annuity loan offer from the same provider with a home savings contract, but I would rather not include a home savings contract in the financing. The home savings contract would be for over €140,000 (interest rate security over the term 24 years, total costs percentage 2.89%) and the annuity loan for €70,000 (10 years, 2.17% effective).
Would it be interesting to present this here once? Basically, I don’t feel good about home savings contracts with the current credit interest rates (0.25%).

Just a (maybe silly) question: What exactly is a Vorsorgedarlehen?

I cannot and do not want to say anything more about the terms themselves, as there are experts here who know the current interest rates better. Personally, I don’t really like building society savings contracts in general either, but you should have a breakdown of the total costs provided to you in order to compare the offer with the other one. Of course, this only works exactly with the same installment.

Have you ever been offered a pure annuity loan?

Oh, by the way: Are you sure that the €250,000 is really enough for everything? That sounds extremely little, but it is hard to assess since you do not write what and how large or where you are building or having built.

I would also argue that you can't build for 250k€ nowadays...

I would also claim that today you can no longer build for €250k...


milkie

Precautionary loan: €120,000
Nominal interest rate: 2.95%, effective: 2.99%
Repayment: 2.55%
Fixed interest period: 25 years
Installment: €550

+

Annuity loan: €900,000
Nominal interest rate: 2.2%, effective: 2.22%
Repayment: 2.5%
Fixed interest period: 10 years
Installment: €352.50

Well - if it turns out to be more expensive than €250,000, he still has several hundred thousand euros in reserve with an annuity loan of almost €900,000. ;) Just a little joke on the side.

The term "precautionary loan" is also unfamiliar to me. Is this supposed to be a Wohnriester loan?
Regarding the building savings contract, I am also skeptical. With an interest rate of 0.25%, you will have a hard time getting back the closing commission paid. Even if you decide for it - there are also others with a lower interest rate (as far as I know).

I can't say much about the interest rates - since we took out our loans, I hardly follow them anymore (don’t want to annoy myself).
However, I can imagine that 2.95% with a fixed interest period of 25 years is quite a good rate. Especially since it’s not even an 80% financing.

Otherwise, I agree with and .
A construction sum of €250,000 including all incidental costs and all "services" not covered by the construction contract seems very ambitious to me.

You should write something about the project here or in another thread. Location, size, type of construction, how the €250,000 is composed, own contributions, etc..
There are enough people here who can judge whether the matter is appropriate or not.
For your financing, nothing would be worse than an expensive follow-up financing.

Well, a late-hour answer. 90000 :)
Thanks for your answers.

Just a (maybe silly) question: What is a Vorsorgedarlehen?
Have you ever been offered a pure annuity loan?

Unfortunately, I can't get a pure annuity loan over a reasonable term at the conditions.
Most banks only offer a fixed term of 10 years or directly at least 3.2% for 20 years, but not alone, usually together with KfW or again with a building savings contract.

The so-called Vorsorgedarlehen is nothing other than an annuity loan which includes various modules that secure the financing.
It is generally available from insurance companies, in this case from R + V.
This loan is available up to a maximum of 60% of the required loan and is no longer subject to any conditions. It used to be different in the past.
Nowadays, insurance companies use these loans to guarantee their existing customers e.g. a guaranteed interest rate (1.75%).

Included in the Vorsorgedarlehen are e.g.:
- flexible repayment from 1-10% (can be changed 5 times without cost)
- free special repayments up to 5%
- repayment suspension on request
- protection of installments for up to 12 months in the event of unemployment due to operational reasons or death

That didn’t sound necessarily bad to me, since I at least save such protection next to a term life insurance.
Insurance company may sound bad now, but it is actually just a simple loan with X.

Oh, by the way: Are you sure that €250,000 really covers everything?
That sounds extremely little, but it’s hard to judge since you don’t write what, how big, or where you are building or having built.

Regarding the house construction itself, it is a fixed price of €210,000 for about 140m², without a basement, with solar and gas boiler, underfloor heating, surveying, measurement, etc.
What remains for me are the house connections, painting work, and floor coverings in a few rooms.
The area is very rural.

In principle, I can probably live with the financing offer, right?
The other offers, also 20-year loans + KFW124, were unfortunately too far off.
A building savings contract also makes no sense for me, even if it is apparently being heavily sold at the moment.