Repay savings or save? + Secure interest rate

Again: it’s not about the monthly installment itself (by the way, we can also change the repayment twice), but rather about the fact that today I can fix an interest rate that can be used in ten years if the normal interest rate rises. The [Bausparvertrag] doesn’t have to be fully saved up for that, I could also continue financing with it!?

Again: it’s not about the monthly rate itself (by the way, we can also change the repayment twice), but rather about the fact that I can set an interest rate today that can be used in ten years if the normal interest rate rises. The building savings contract doesn’t have to be fully saved up, I could also continue to finance with it!?

Exactly that problem has already been addressed several times here. If the saver does not save up enough so that they are entitled to allocation in 10 years, then you have no interest rate security at all, but you have to take out an expensive interim financing in 10 years (which can be dictated to you by the bank), while your saved money waits in a poorly interest-bearing building savings contract until it is entitled to allocation. Only when the building savings contract is entitled to allocation is the loan/interim financing redeemed and you can then make use of the favorable loan from the building savings contract.

If the building savings contract is just entitled to allocation in 10 years and you could not pay installments into the building savings contract for one year, then it’s simply not enough if you pay double your installments into the building savings contract the following year, because you still don’t have the same valuation number.

Since I’m still not sure whether you have understood the building savings system, I want to point out again that you cannot compare the interest rates quoted by the building society with interest rates from annuity loans.

How long is the building loan actually planned for? Usually, that’s not much longer than the savings phase.
You would have a similarly long interest rate security with a 20-year loan.

Exactly this problem has already been mentioned several times here. If the building savings contract is not saved in such a way that it is ready for allocation in 10 years, then you have no interest rate security at all, but have to take out an expensive bridging loan in 10 years (which can be dictated to you by the bank) while your saved money waits in a poorly interest-bearing building savings contract until it is ready for allocation. Only when the building savings contract is ready for allocation will the loan/bridging loan be repaid and you can then use the cheap loan from the building savings contract.

I consider the risk that the building savings contract will not be allocated on time to be manageable. And if so: just let the building savings contract become ready for allocation, for example, 1 year later, then you can simply extend the annuity loan by 1 year (an extension of 1 year is usually always the cheapest interest rate compared to longer fixed interest terms). A follow-up interest rate will always be dictated by the bank anyway (in addition to the market conditions). So you also have this risk with the variant without a building savings contract, as in your case after 15 years.

Another big advantage of the building savings contract variant is that you can repay at any time and in any amount during the repayment phase. This can become interesting in cases of inheritance or house sales. While you can repay a building savings loan free of charge, you may have to pay the bank a prepayment penalty with an annuity loan (if the market interest rate at the time of repayment is higher than the extended interest rate. And this becomes more expensive the wider the gap is. If the market interest rate at the time of repayment is lower, no prepayment penalty is incurred (possibly only a processing fee at most).

No, I would not choose the home savings contract in a lump sum that I might not be able to muster. Rather, so that I comfortably reach amount xyz for the allocation, everything I contribute additionally monthly (or not) is good but not necessary. However, if I set the annuity loan much higher from the rate, I might not be able to securely service the home savings contract. I have processing fees, but also allowances.

For me, the advantage of the building savings contract variant clearly outweighs the ABSOLUTE planning security from the beginning to the end of the financing (of course only if the building savings sum exactly matches the remaining debt of the annuity loan at the end of the fixed interest rate period). And yet, you are absolutely flexible.

IMHO, you are not that flexible. If you do not keep up the installments, you lose the entitlement to allocation and the construct collapses. If you could maintain the installments, an increase in the annuity would be more attractive.

Cost security is more likely if you have a longer fixed interest rate period.

I see it exactly the same way. Plus the option for special repayments, to be able to put uncertain income into repayment without setting the annuity too high.

IMHO, you are not that flexible. If you don't keep up with the installments, you lose the allocation eligibility and the construct falls apart. If you could maintain the installments, an increase in the annuity would be more attractive.

I have written the "solution" right here:

I consider the risk that the building savings contract is not allocated on time to be manageable. And if it is: simply let the building savings contract become allocation eligible, for example, 1 year later, then you can just extend the annuity loan by 1 year (an extension of 1 year usually has the cheapest interest rate compared to longer fixed interest terms).

Or simply catch up on the installments. As Musketier rightly pointed out, but then with higher effort to reach the evaluation score for timely allocation.