Questions about the financing offer

The Wohnriester provides 25 years of interest rate security. At 1250 per month and 25 years, which equals 300 months of duration, it therefore costs 375,000. And you are free. From debt. All other constructs seem cheaper but have no interest rate security. And, since he does not want to sell it, I am not so sure if he has included the government subsidies. Possibly it does cost 1250 per month, but in reality you pay less yourself because of the Riester subsidy.

@ are you aware of the disadvantages of wohnriester?

Taxation of the pension until 85. Tied to the property. Repayment if you have to enter a nursing home.

No panicking allowed. The basic idea: Riester is a pension. If, say, €200 pension came out now, it would be taxed at, say, €20 per month. So, now I save the Riester to repay a mortgage loan. No pension, but no rent either. Now it is fictitiously assumed, what would that be as a pension if it were one? That has to be taxed. Let's say again about €20 per month. Alternative, I pay all taxes immediately at the start of the pension and I believe I get a 33% discount. I have just dealt with this a bit because I plundered my Riester contract to avoid debt for the house down to €3,000. That is possible too, to increase equity. I will have about €10k in pensions, that is pocket money as a pension, taxes on it barely worth mentioning, and about €20k to be taxed due to the plundering, €20 over 20 years would be about 1 per year, that's under €100 per month. What that brings in taxes, I laugh about it. Karsten

Thanks in advance for the quick answers. Unfortunately, I still don’t really understand it. Maybe I’ll list the respective advantages I see or have been told.

Offer from the financial advisor:

[*]Monthly rate is lower (I understand that this would extend the repayment period, although I will certainly make special repayments in the next few years)
[*]You have a free advisor who is available to help with all payments and financial questions (I have no idea how difficult it would be to handle this alone)

Offer from the Riester advisor:

[*]Subsidy from the state
[*]Low interest rates over 23 years
[*]Monthly payments are already made in the Riester contracts (by my fiancée and me), and according to the advisor, this would go directly into the repayment -> for example, the monthly rate is €1200 and if the monthly contributions from both are, for example, €100 each. Then, in addition to the monthly contributions, only €1000 would have to be paid for the loan (is that correct?)

A few details about us:

[*]both in their early 30s
[*]both employed, net income approx. €3700
[*]equity approx. €60k (previously deducted from the purchase price -> therefore loan amount €300,000)

I hope you can help me here and/or correct me if I have misunderstood anything.

Regards

Can you really afford the 1250€? Like, really afford it? Then I would have offer number one with a higher repayment presented to me. : You can also unconsciously get scared. Sure, the Wohnriester option gives security, but it also costs more. The effective interest rate of offer 1 is so low that you can repay a lot and, due to the then low remaining debt, have less risk.

Joe, I'm not so sure whether Riester will become more expensive despite 23 years of interest rate security. The contracts are apparently already in place and are being paid into. The additional repayment is therefore 1250 minus what is already being paid. Or am I making a mistake? Wohnriester is unfortunately complicated, but that doesn't mean it's bad. Karsten