Which installment should be paid off first?

Good morning,
we have the following components in our construction financing:

1. 100,000 Euros over 20 years with 1.51% interest and 2.75% repayment. (KFW 153)
2. 180,000 Euros over 15 years with 1.66% interest and 2% repayment.
3. 50,000 Euros over 10 years with 1.16% interest and 2% repayment.

For all three components, an annual special repayment is possible. Annually, 4,000 - 5,000 Euros special repayment would be "easily" manageable for us.

My consideration is to have the small third loan completely paid off after 10 years and then to put the special repayment into the second component. Or does it make sense to focus on this one from the start?

Regards

Maybe it makes sense to put the first special repayments into the second contract, then you won't pay interest on the special repayments made for 13-14 years. Whether it's worth it would have to be calculated. And then use the special repayments to ensure that the third contract ends without (or with little) residual debt.

Are you allowed to make 10% special repayments on the third contract? Otherwise, you could split it (and would have to think about what to do with the residual debt of the contract).

I find the repayment in all three contracts relatively low and you end up with a high residual debt on each contract.

Thank you for your response. I just wanted to keep the repayment low and do a lot through special repayments. But I will think again about whether I should set the rate for the third to 4% repayment and repay 2500 euros annually. Then it would be almost paid off after 10 years.

You can do that. But in my opinion, the general consensus in the forum is rather that once the house is built, so many additional expenses arise for which you could spend money, that you have to be very disciplined to save money for special repayments.

I would have tried to repay the contract with the highest interest rate first.

Where the special repayment is most effective, your bank advisor should be able to tell you in 1 minute. Without having calculated it, I would say that the second component offers the best effect, so I would put the maximum amount there. You should also be able to see this from the actual effective annual interest rate!?

Best regards
Dirk Grafe