Question about an interest-bearing loan

Hello,

my construction financing is based on 2 loans.

On the one hand, a normal mortgage loan (annuity loan with interest and repayment (3%)) and on the other hand, an interest-only loan.

I have basically concluded a home savings contract, where the amount is immediately made available to the already existing mortgage loan and I pay interest for it monthly, and additionally save for the home savings contract with a monthly installment. The contract runs for 10 years and I have the agreed "secure low interest rate" for the follow-up financing.

But here is my misunderstanding: I hardly repay anything in the 10 years and pay interest only for 120 months. For the home savings amount of €40,000 and an interest rate per month of about €130, that would be a lot of interest in 10 years.

I will save about €170 per month. For this, there are again interest payments from the home savings bank and at the end of the term, the loan or the outstanding debt will be refinanced at the then low interest rate; in the end, an effective interest rate of 4.21% results.

I hope this doesn’t come across as too complicated and someone can clarify this for me.

Best regards
bille

Hello,

classic bridging finance of a building savings contract. The building society advances the sum. You pay interest. At the same time, you save into the building savings contract. When it is ready for allocation in about 10 years, you then have a claim to a building loan. Sounds great.
Have you already looked at the repayment rate of the building society? They demand quite high repayment installments. Many building savers don’t fall during the savings phase but only in the repayment phase.

Regards Ille1975

Hello,

yes, I know that the repayment is then relatively high, but this was also taken into account by me and is to be serviced.

The advantage of my annuity loan is that I can make special repayments at any time in unlimited amounts.

Regards
Sascha