Wfa credit runs for a very long time oO?

Hello,

our house construction project is covered by 2 loans. On the one hand the Sparkasse loan and on the other hand the Wfa loan.

With the Sparkasse we pay back 2% and with the Wfa loan 1% (I have to find out if it is allowed to increase this)

Anyway, I sat down again yesterday and created a repayment plan in Excel. Without special repayment, we would need about 26 years for the Sparkasse loan (160,000 EUR) if our income situation remains the same.
With special repayment (I have assumed 3k per year) the Sparkasse loan would be finished in 18 years.

I was a bit shocked with the Wfa loan if we remain at 1% repayment (102,000 EUR), it would easily take 40 years.

Did I miscalculate somewhere? Or is it simply because 1% of 102,000 is much less than 2% of 160,000?
Otherwise, I wouldn't know any explanation.

Correct - but it must be "repayment rate" not interest rate. The amount of the interest rate only affects the total sum, but not the repayment. Only the ratio of the amount between repayment portion and interest portion that you pay back monthly changes over the term of the loan. Normally, you are informed of the expected term when concluding the contract.

Hello Jörg24,

it is already correct as I wrote it, here is a detailed explanation of the influence of the interest rate on the term of annuity loans:

For a 100,000-euro loan, builders pay just around 420 euros at four percent interest and one percent repayment. During the high interest phase, sometimes nine percent interest had to be paid. At one percent repayment, a monthly amount of about 830 euros then had to be paid.
As nice as low interest rates are for the wallet of a homebuilder: the lower the interest rates, the longer it takes to pay off the loan. Four percent interest and one percent repayment means: the builder pays off the loan for 40 years. With seven percent interest and one percent repayment, it is only just under 30 years, and at nine percent about 25 years.
The reason: with annuity loans, the borrower pays a constant monthly rate for interest and repayment during the fixed interest period. Since part of the loan is repaid with each installment, the composition of the rate changes over time: the interest portion decreases, the repayment portion increases. With a loan at a high interest rate, the monthly rate is higher; through every repaid euro, relatively more interest is saved – the repayment portion grows faster.
That is why it makes sense to agree on a higher repayment rate with low interest rates. At four percent interest and two percent repayment, it only takes about 25 years instead of about 40 years to repay the loan. Another option is to agree with the bank on an annual special repayment right. This is possible with many banks, some credit institutions even offer this option free of charge. A usual special repayment right is up to five percent of the original loan amount per year.
The advantage: if the builder is short on cash in one year, they simply do not exercise their special repayment right. In financially good years, the special repayment helps to significantly shorten the repayment period. An example: those who manage to exercise the special repayment right of five percent each year on a loan with four percent interest and one percent repayment are debt-free after significantly less than 15 years instead of about 40 years.

Ok, I got it. Of course, that's correct. Although you have to assume that the average builder tends to think more about the monthly installment and then increases the repayment portion until the "limit" is reached. But there are also enough people who, despite low interest rates, go all out and push to the limit. However, that is not really advisable. It's better to be a bit cautious with the loan amount and be happy about every possible tenth that you can put earlier into the repayment. I do not recommend terms over 30 years.