Use own capital or borrowed capital for a single-family house?

Hello everyone,
we want to fulfill the dream of owning a home and have the opportunity to buy a building plot for 160k. The plan is to build a single-family house with a granny flat for 550k. Now the question is about financing. We are in the fortunate position that we could implement our project entirely with our own funds, but short-term liquidity is important to me, so I would still like to finance part of it. The current idea is to take out two KFW-subvented loans of 120k each and to provide the rest as equity. We are currently also repaying a loan of 200k for two condominiums. We live in one of them ourselves and plan to rent it out later. What would you do in our situation?

Best regards

Hi, well low-risk investments yield nothing ... so why pay loan interest ... although you can offset it against rental income. Difficult. Just one thing about KfW. You always need a commercial bank to channel it. They want to make money and want to include their own loan. Only KfW is difficult to impossible.

Through the repayment grants from the KfW, it should be possible to get a virtually interest-free loan, even if we also take out a small loan from the commercial bank, or is my understanding incorrect?

With the repayment subsidies from KfW, it should be possible to get essentially an interest-free loan, even if we additionally take out a small loan with the commercial bank, or is my understanding incorrect?

well, you would have to take out at least €50,000 without KfW. Yes, it's a calculation example ...

So in the worst case we will take two KfW loans of 120k each and one from the commercial bank for 50k. The interest burden should not be very high and ideally even negative, and for that the 290k will always be available in an emergency. I will inquire about the terms for that at a bank.

Only KfW will be difficult to impossible

But it works. Just make a few phone calls, then you will find a bank. In the extreme case, they don't even want an entry in the land register as security... The old saying applies: banks only lend money to those who don't need it. But then, in the current low-interest environment, they practically throw the money at you.