Real estate financing through OLB?

Does a 30-year fixed interest period really make sense?
With this constellation, a surcharge is paid twice. Once for the long fixed interest period and once for the 10% special payment. Both will hardly be possible at the same time.
I think it can currently be done much cheaper overall.

Hmm, so it hardly made a difference whether 20 years fixed interest period or 30 years.
At OLB, that is a difference of 0.05% more.
Why shouldn't a long fixed interest period make sense?
At Oldenburgische Landesbank (OLB) there would then be an interest rate of 2.79% and at the Commerzbank for example an interest rate with 20 years fixed interest period of 3.43%

: The bank advisor said that this has NEVER happened before. However, if the bank ever needs capital one day, they could sell loan contracts. Especially if the loan contract is not particularly profitable for the bank.

As I understand you, your sister has not worked with OLB so far. So there is no comprehensible reason for this bank – long-standing business relationship/possibly self-employed etc. – to deviate from their "normal" offer of construction financing. Therefore, and if your sister meets her payment obligations, imho no reason to get rid of this financing. Otherwise, as nordanney has already written; if your sister can no longer service the loan, it does not matter who pushes the foreclosure. Rhenish greetings

: I have read that the "new bank" then does not insist on the actual repayment of the debt, but on the land charge. I have also read that such banks then cancel the credit agreement and insist on immediate payment of the amount and in the end foreclose on the house.

It could enforce the land charge = foreclosure, but would immediately be stopped again by the court because the underlying debt = loan is being properly serviced. To explicitly assign the land charge to a loan, there is always a land charge purpose declaration. Cancellation is not possible at all, as there is no formal right of termination - only extraordinary termination, but then we are back to the issue that you are not servicing your loan.

I do not know of any cases where the poor borrower was simply thrown out by the bad banks. It may be rough sometimes, but first it is always the borrower who "provokes" this by no longer paying their installments.

Why shouldn't a long fixed interest period make sense?

Because the long fixed interest period is paid for in vain if you/your sister, for example, are already finished after 23 years, which happens relatively quickly with a few special repayments. I just calculated it. 30 years means a full repayment rate of about €550. If a special repayment of only 1% took place every year, you would be finished after 23 years instead of 30 years. With the 20-year fixed interest period, the interest rate could rise to 5% and you would still be better off. The same little game calculated with a 15-year fixed interest period with an assumed interest rate of 2.59% for years 1-15 and an interest rate of 5% after the fixed interest period means finishing 10 months earlier, i.e. €5500 less cost. I only assumed 1% special repayment (= €1330 per year). But 10%!!! are agreed.

: That is a very interesting approach. But the whole thing only works if you can really use the special repayment and diligently pay your €1,330.00 per year. However, it is questionable whether you can always invest that. The house was built in 1999, but eventually the heating system will also need to be replaced, etc. And not everyone can set aside a huge amount of money each month in addition to the repair savings cushion. Especially not if you have children. And furthermore, there was also the possibility for the borrower to terminate the loan contract after 10 years. According to the bank advisor's statement, this could be done without prepayment penalties.

: That is a very interesting approach. But it only works if you can actually make use of the special repayment and faithfully pay your €1330.00 per year every year. However, it is really questionable whether you can always invest that. The house was built in 1999, but eventually the heating will need to be replaced, etc. And not everyone can set aside a huge amount of money each month in addition to the repair savings cushion. Especially not if you have children.

Then I wonder why 10% special repayments are agreed upon when you can't even manage an average of 1%. 10% should mean a surcharge compared to 5%, and that in turn means a surcharge compared to 0%.

And additionally, there is also the option for the borrower to terminate the loan agreement after 10 years. According to the bank advisors, also without early repayment penalties.

Even with this option, you would have paid too much compared to a fixed interest period of 15 or 20 years.