What financing is suitable for new construction in 2018?

Hello everyone,

we are going to purchase a new semi-detached house of 170 sqm in Baden-Württemberg.
The negotiated purchase price is 455,500 EUR.
We are now faced with the choice of financing.
We still have to lay the floors ourselves and have painting/plastering work done, costing about 20,000 EUR.
We will cover this from our own funds.
We want to keep about 40,000 EUR of remaining equity out of the financing.

Now we have various offers.

One is a classic annuity loan from Interhyp
Purchase price + incidental purchase costs 487,385 EUR
Less existing equity to be contributed 70,000 EUR
= Financing requirement: 417,000 EUR
Fixed interest period 20 years
Effective annual interest rate 2.44%
Installment: 1,529 EUR = 2% (which is also realistically possible)
Loan term 33 years
Remaining debt at the end of fixed interest period 204,000 EUR
Prepayment 5% possible

Alternatively, Interhyp with the same setup and 80,000 EUR equity (which would certainly be possible)

Fixed interest period 20 years
Effective annual interest rate 2.06%
Installment: 1,500 EUR = approx. 2% (which is also realistically possible)
Loan term 30 years
Remaining debt at the end of fixed interest period 168,000 EUR
Prepayment 5% possible

Then we were offered a combined model by another local financier through a local bank: PSD TopBaugeld30

Here there is once an annuity loan of 91,000 EUR
Fixed interest period 10 years
Effective annual interest rate 1.56%
Installment: 178.21 EUR
Loan term 33 years
Remaining debt after 10 years: 83,101 EUR

and then the home savings contract through Schwäbisch Hall Fuchs 03, variant FuchsImmo 1 (XV)
Loan amount from 30.06.2018 326,000.00 EUR
Expected duration of pre-financing 14 years
Fixed nominal interest rate annually 1.650 %
Fixed interest period until allocation
Payout rate 100.000 %
Effective annual interest rate for total duration from pre-financing 2.36 %
The effective annual interest rate includes the costs of securities for the bank’s pre-financing in the amount of 685.00 EUR.
The effective annual interest rate refers to the effective annual interest rate for the total duration. This includes all your payments related to the pre-financed home savings contract as well as any possibly already existing home savings balance at payout.

According to this model, we are to pay 1,334 EUR until 01/2046 and then the matter is settled, except for the annuity loan after 10 years, which we could very likely partially or fully repay.
We believe we have understood the model, but cannot fully see which makes more sense for us.

Thank you very much for tips and opinions on this.

Sorry, please move to the correct forum Finanzierungsplan/Finanzierungsvarianten. Thank you very much

I assume that you have already noticed yourself how positively the loan-to-value ratio affects the interest rates (comparison between the Interhyp alternatives).

So think carefully about whether you want to use another part of your equity after all. You should also consider whether you want to go with a 3% repayment rate if your financial situation allows it.

I paid attention to every 1/10% in my financing. Therefore, I do not understand your question about which financing you should choose. The cheapest option has an interest rate of 2.09% and the most expensive one 2.44%. On this amount, every 1/10% makes a lot of money in interest over the total term.

Look at the total costs of the financing and you will realize which financing makes sense.

Alternatively also Interhyp same constellation with 80,000 EUR equity (would be quite possible)

Fixed interest period 20 years
Effective annual interest rate 2.06%
Installment: 1500 EUR = approx. 2% (is also realistically possible)
Loan term 30 years
Remaining debt at the end of the fixed interest period 168,000 EUR
Special repayment 5% possible

That is the cheapest option after all, what else is there really to consider?

To compare something like this, I built myself a nice Excel tool that also takes opportunity costs into account. So the answer here is not that simple. Often, higher financing is the better idea.

If offer 2 from Interhyp is correct, go for it, these are extremely above-average conditions. I come to at best 2.24% with the numbers for a 20-year commitment, maybe he also calculated 15 years for you or a portion with KfW with a shorter fixed interest period. Always have the total costs calculated up to the end of the fixed interest period, then the comparison is not a challenge.