Wohnriester home savings model - fixed interest rate and repayment

We are currently finalizing the financing of our house purchase. Basically, we are looking at a 3% repayment rate with a 15-year fixed interest period. The building savings model is either considered by advisors to be too high, too inflexible, or the interest rate is simply too expensive. However, since after 15 years about 50% of the amount will still be outstanding, we are considering whether to at least secure part of it. A classic building savings contract is always an option, but already two bank representatives have tried to make a Wohnriester attractive to us. I would definitely not "sacrifice" my existing Riester contract, but my wife's would be worth considering. However, the knowledge about Wohnriester among the bank advisors seems rather limited.

Now to the actual question:
One provider has now suggested that my wife and I simply each take out an additional Wohnriester. No state subsidy would be claimed for this. The background is that the bank offers a Wohnriester building savings contract at a lower interest rate than a classic building savings contract. The question is:
- Is it really that simple?
- Can I really avoid subsequent taxation without state subsidies and tax refunds?

Somehow it sounds too easy and too good, so first I don’t want to put myself on thin legal ice (would I be cheating the bank?) and secondly, to be one of the first to have something like this noticed. If it were really that easy, many would do it.

If you want to secure something at today's interest rates, I recommend a higher repayment. Everything else mainly benefits the bank.

I wouldn’t get a Wohnriester Bausparvertrag, rather a Wohnriester loan, if you don’t mind the disadvantages. Then the subsidies can be used directly for repayment. But otherwise, I wouldn’t get a Bausparvertrag at all. The biggest disadvantage besides the signing bonus is simply that the savings rates stagnate for years at low interest rates and not a cent is repaid with them. At some point, it will be used for repayment, but then you have paid interest on an amount for years that wouldn’t have been necessary. In other words: it would be better to put every available euro directly into repayment, e.g. through special repayments. The thousands of euros you save in interest cannot be compared at all with the lousy Bauspar interest.

A pure building savings contract is out of the question for us anyway. We will definitely work with annuities. The building savings contract would be used to secure favorable interest rates for a large part of the remaining amount. That means paying off a little bit lower (about 2.7-2.8%) and putting the difference into a building savings contract that matures for allocation after 15 years. Then, after 15 years, there will be slightly more remaining debt (the allocation of the building savings contract can then be used for repayment, so that only the somewhat higher interest payments matter). We would then have about €150,000 remaining debt, of which €80,000 is secured at favorable fixed interest rates of the building savings contract, so the interest rate uncertainty after 15 years only exists for €70,000. I realize that I pay for this with somewhat higher total interest, but so far it seems to me like a nice compromise between interest rate security and interest rate level. A Riester loan is therefore currently not interesting.

However, my question remains:
Does a Riester contract without government subsidy and without tax refund have to be subject to deferred taxation in the income tax return upon retirement?

Our bank advisor said that if you don’t take advantage of any subsidies, you don’t have to pay taxes either, but I am not so sure about that, or rather, I don’t know if it can still even be called a Riester contract then.

But otherwise, I wouldn’t take out a building savings contract. The biggest disadvantage apart from the signing bonus is simply that the savings installments with a low interest rate lie dormant for years and not a cent is repaid with it.

I just want to advise you here to calculate all models for yourselves. The difference lies in the conditions that the banks offer you. Here is our real example for a 400k€ financing, which is always combined with KfW153. Repayment suspension (2.02% interest) + building savings contract (2.5% interest): 1536€ monthly rate = total debt is interest-rate risk free. In total, including all costs, 552,426€ are paid. To have the same risk freedom, I compare a 30-year full repayment mortgage: This has an interest rate of 3.06% with us and thus a monthly burden of 1,616€. In total, including all costs, 579,231€ are paid. So my tip: simply calculate all models for your individual situation with real offers from the banks and compare both the monthly burden and the total costs over the entire term. Of course, the cheapest option is always to secure yourself for only 10 years. But then we are back to crystal ball reading and that has to be decided by each individual. Best regards