Which financing concept for the house is the best?

Hello guys,

which financing concept do you like best?

Component 1a:
Loan amount €153,000
Fixed interest period 15 years
Effective annual interest rate: 2.77%
Initial repayment: 2%
Repayment rate adjustment: 1x/year between 2-3% possible

Component 1b:
Loan amount €153,000
Fixed interest period 20 years
Effective annual interest rate: 3.39%
Initial repayment: 1%
Repayment rate adjustment: 3x during fixed interest period

Component 1c:
Loan amount €153,000
Fixed interest period 25 years
Effective annual interest rate: 3.52%
Initial repayment: 1%
Repayment rate adjustment: 3x during fixed interest period

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Component 2:
KFW Energy Efficient Construction: €50,000
Fixed interest period 10 years
Effective annual interest rate: 1.26%

Component 3:
KFW Home Ownership: €50,000
Fixed interest period: 10 years
Effective annual interest rate: 2.02%

The two KFW components are independent from Component 1.
For all offers we have the same factors, such as:
- annual special repayments up to 5% possible
- 12 months interest-free provision period
- repayment-free start years: none -> not necessary here, as the amount is paid 100% to the builder after final acceptance.

Now it comes down to a gamble: longer fixed interest period with a higher interest rate or fix it at 15 years and take the better rate? -> Advantage: With the 2% repayment, we can repay most of the loan amount within 15 years, so the risk of an interest rate increase after 15 years should be relatively low. What do you think?

Current income of me and my partner: €4,550 net/month. From 1.1.2015 rather €4,800 net/month. Trend is rising. Car loan runs until mid-2016 (€485/month).
We want an initial annuity of about €900 (years 1-10) then increase to about €1,500 (years 11-20) and then to €2,000 -> until full repayment.
If some money is left over during the year or bonus payments from the employer come in, we would use the special repayment option. The plan is to fully repay the loan within 30 years. With regular special repayments maybe already in 25 years.

You have written a lot, but the only thing I can say about it is that the choice of the fixed interest period depends on personal risk tolerance.

It is best to use Excel to calculate what the interest rate will be at the end of the fixed interest period and assume different interest rates for the extension. Also, one should not compare apples to oranges, but rather assume the same monthly annuities. Otherwise, the 15-year option will always remain the most attractive in terms of total costs here.

Especially regarding the 25-year option, one should ask oneself why a special repayment has been agreed upon. If one intends to use it occasionally, it is quite possible that one will be finished after 20 years and would have paid the interest surcharge for nothing.

Do you have 100% financing? I find the interest rates very high.

Do you have 100% financing? I find the interest rates very high.

This is how perceptions shift. One can hardly speak of "very high" in these sentences. Not even in direct comparison with the current interest rate level.

But they are already high - more than one percent higher than usual.

Moreover, I find the repayment too low - with the first element and package it is just borderline, the others with 1 percent are not really sustainable at this interest rate level.

And to speculate that more will be possible someday... I wouldn’t do it. From the very beginning, take the highest amount you can handle and want, and that leads to a good financial conclusion mathematically. If later you can manage more, then you will simply be finished even sooner.