Your assessment of the financing component

Good evening everyone,

I would be interested in your opinion on the following offer.

150k equity is going into the project, the remaining 515k will be borrowed:

[*]515k€, fixed for 20 years, interest rate 1.72%, monthly payment 2500€
[*]You can vary the repayment once per year between 1% and 5% and thus flexibly control your rate. Additionally, you have 18 months without provision interest and the option to make 100% special repayments at any time.

I asked, we could indeed make special repayments at any time in any amount. Repayment starts as usual after 100% of the sum has been drawn, at the latest after those 18 months. I want to have a calculation made for a variant with a 15-year fixed interest period, as we could raise the repayment with our desired rate and possibly get the option for a medium-small special repayment. According to the model above, we would be finished in about 20 years and 3 months.

The savings bank advisor, with whom we financed the land, said yesterday "if you really get it like this, sign." The offer is through Haus&Wohnen, subject to the bank’s appraisal, but I am rather confident about that.

Where is the catch?? What would you do?

Thanks in advance

Without me getting deeply involved with financing, I only read here now and then, it seems to me that this is also a great offer.

If I have calculated correctly, your rate of 2500 euros corresponds to an initial repayment of about 3.4 % and you are additionally fully variable.

The rate seems a bit high to me. Calculated at 1/3, you should have about 7,500 net. Hats off, Mrs. Mütze, if that is really the case....

Sign! I had the same clause in 2012 with the restriction of 5 years after full repayment. This allowed me to refinance very cheaply without prepayment penalties. Although, of course, you are in a low interest rate phase. Does it say anything about special repayments? Are there minimum amounts? Not that you can ONLY make 100% special repayments and not less... and 500k at once, the money has to come from somewhere. Is it an insurance company offering it?

- has been resolved -

Is there any information about the special repayment? Are there minimum amounts? Not that you can ONLY repay 100% as a special repayment and nothing less... and 500k at once, the money has to come from somewhere. Is it an insurance company offering it?

Thank you for the hints, I will check that. I have a personal appointment on Tuesday, until then "only" preliminary information. The agent mentioned a bank and an "absolute special condition". I am curious whether it will really stay that way in the end.