Which installment should be paid off first?

I have already indicated the effective interest rate. I have an appointment with the bank advisor next week, I just wanted to get opinions beforehand. Paying off the part with the highest interest rate first also sounds plausible to me.

Thank you for the previous answers.

I also face an annual decision. Extra repayments in the contract with the highest interest rate or in the contract that expires after 10 years.
Due to the compound interest effect, extra repayments make the most sense in the contract with the highest interest rate.
Depending on what interest rate you expect after 10 years, the 3rd component might also make more sense.

In the first years, we primarily repay the loan with the highest interest rate and see how the interest rate develops. If it goes up, we respond to that and switch.
Otherwise, after 10 years, we could end up having too much free money due to the freed-up installment. Especially since we are already making relatively high extra repayments and no repayment rate change has been agreed upon with us.

Certainly, purely from the compound interest effect, the special repayment on the 2nd loan would make the most sense. Since the interest rate is highest here, the "negative compound interest effect" has the greatest impact over the term.

However, I can understand the consideration regarding loan 3. Here, your goal would be to pay off the loan after the first 10 years of fixed interest. This way, you can either reduce your monthly burden or use the saved €1,580 p.a. to increase the repayment of the other loans. This is how we also do/plan it.

Since you want to make special repayments for 10 years and plan €5,000 annually, you can play around with Excel a bit. 10 x 5,000 = 50,000. This means that you could place at least two special repayments on one of the other loans (rough calculation: 50,000 x 2% repayment rate = €1,000 repayment p.a. x 10 years). Therefore, it would be advisable to put the first two special repayments into loan 2 (better compound interest effect) and then channel the annual special repayment into loan 3 (for paying off after 10 years).

BUT beware - the unexpected often happens. In the next 10 years, something might always come up that prevents you from making your special repayment.

Besides, with us it could happen after 10 years that we have too much free money due to the released installment. .

I would also like to be able to make such a statement sometime.

I can imagine that. But it always depends on the financing. We deliberately kept the installment low with a 2% initial repayment rate because of upcoming parental leave, the subsequent part-time work of my wife, and in the event of unemployment or disability insurance (BU). The remaining repayment should then be made flexibly through special repayments. However, due to a significant salary increase, we are currently able to make much higher special repayments than planned. At the moment, the maximum special repayment of 5% per year on the main loan is possible. From the current perspective, we approached the financing too cautiously. But no one could have known that at the time of contract conclusion.

Since the original poster (OP) wants to follow a similar strategy and also mentions larger special repayments per year, this effect could occur for him as well if a rate is then dropped.

The "problem" can be managed by different terms, which the original poster already has. After 10, 15, or 20 years, you simply take the accumulated equity and finance less afterwards or adjust the repayment of the remaining loan upwards.

Best regards
Dirk Grafe