Repayment deferral loan vs. annuity loan

Doesn't it all balance out, allowances are eaten up by costs (by the way)

I don't understand your point right now.

Allowance of €5,071.10 and tax benefit of €14,333.00 = €19,404.10 and thus more than the costs of €16,500. Sure, most of it gets eaten up, but still with almost €2,900 in profit. The contract already exists with a balance of €4,600, so I am not taking out anything new and can contribute it that way. The house would be paid off by age 56 and I would still have 10 years left until retirement to prepare for the €16,000.

So you would be in favor of option 2 because you generally don't like Riester or you don't consider it sensible in the case I described?

Riester doesn't pay off for construction if you take it as a Riester loan. But if there is a Riester that was originally meant as a pension, and there is already a bit saved, you can also use it as equity. That is reasonable. Equity is always better than borrowed money. Better to have than to need.

yes exactly, Wohnriester is already available with €4,600. Either use it now with option 1 or kill it at a loss.

I don't understand your point of view right now.

Allowance of €5,071.10 and tax benefit of €14,333.00 = €19,404.10 and thus more than the costs of €16,500. Sure, the majority is eaten up, but still with nearly €2,900.00 in profit. The contract already exists with a credit of €4,600, so I am not taking out anything new and can incorporate it that way. The house would thus be paid off by age 56 and I would still have 10 years until retirement to prepare for the €16,000.

So you would be for option 2 because you generally don't think Riester is good or don't consider it sensible in my described case?

yes exactly, Wohnriester already exists with €4,600. Either use it now with option 1 or kill it at a loss.

yes, just barely in profit. You are ignoring the fictional Riester account which you have to tax later? Here you also have to take your personal tax rate and deduct that from the profit.

If you don’t have 8 kids, Riester is not worthwhile. I earn €80k a year and at some point I had no more tax benefit and took the thing apart.

not worthwhile

Are we talking past each other or did I really not understand the housing promotion account?

The amount of the fictitious Riester account is just under €90,000 at retirement, and this must be taxed retroactively with the mentioned just over €16,500. On the other hand, there are benefits of €19,000.

Therefore, my assumption was "benefit > disadvantage", even if only minimal, but still.

Or is there something additional that I have actually not taken into account yet?

Are we talking past each other or did I indeed not understand the housing promotion account?

The amount of the fictitious Riester account at retirement age is just under €90,000 and it must be additionally taxed with the mentioned good €16,500. In contrast, there are advantages of €19,000.

Therefore, my assumption was "advantage > disadvantage", even if only minimal, but still.

Or is there something additional that I have not yet taken into account?

yes, and how do you come to the advantages?

you calculate subsidies and tax savings. What are all the costs of the contract that are disclosed?

I had a great interest rate of 2.25% and still it was not worthwhile because the initial and administrative costs were higher (the first 10 years) afterwards there were only administrative costs.

calculated for the whole period. My Riester would have had to yield 5.6% for everything to break even. That means contributions paid minus taxes, costs, and then the subsidies.

5,071.00 € Riester allowance, which goes directly into the building savings contract as repayment, and 14,333.00 € tax advantage, which comes back through the annual income tax adjustment. If you want to make it look better, you could also say that the advantages are now worth more inflation-adjusted than the disadvantages in 40 years.

Because of the costs, I have compared it with Excel and the costs of the building savings contract are added to the repayment amount, so that the total interest is meaningful in comparison and both options are equal.

As you can see, I am currently in favor of the building savings contract, but that's why I am here, to be made aware of any logical errors.

5,071.00 € Riester subsidy, which goes directly into the building savings contract as repayment, and 14,333.00 € tax advantage, which comes back through the annual income tax adjustment. If you want to put a positive spin on it, you could also say that the advantages are now worth more inflation-adjusted than the disadvantages in 40 years.

Regarding the costs, I have compared them with Excel, and the costs of the building savings contract are added to the repayment sum, so the total interest is comparable and both variants are on par.

As you can see, I am currently in favor of the building savings contract, but that's why I am here—to be made aware of any errors in reasoning.

The other way around

Financing and building savings contract are inflation-proof. Your income will grow = tax progression = more taxes

There are too many unknown levers in Riester for me.