Your judgment on our financing offer?

We had a meeting at Interhyp yesterday. We found the advice there both comprehensive and professional.

Since I don't know if the name of the bank under consideration may be mentioned, I'll leave it out for now.

Key data:

Total loan: 265,000 euros
Fixed interest rate period: 10 years
Effective annual interest rate: 1.09%
Options for special repayments once a year up to 5%
Option to adjust the repayment rate (we start with 4.75) twice for free, between 1-10%.

The calculated total duration would be just under 20 years. However, we think we can make good use of the special repayment options.

We can safely take the "merely" 10-year fixed interest rate period as a civil servant. We know what I will earn in 10 years and this money is secure.

The option to adjust the rates is interesting for my husband as self-employed or for the option of having a third child.

What do you think?

I believe that an evaluation is not possible because too many details are missing. Please take a look at other posts here in the forum and add the missing information.

Could you perhaps kindly tell me which information is required? I did not find any overview catalog here and if you tell me what exactly is missing, we would be faster...

If the total purchase price including incidental purchase costs and budget for renovation etc. is important: 380,000 euros, we are contributing 115,000 euros equity.

I think that for the bankers, a breakdown of the 380T€ is still important, since renovation depending on the work is not fully included as value-enhancing and possibly some renovation work is planned in this context.

Have you also had a 15-year loan calculated?
It would be interesting in this context whether you can already roughly estimate to what extent you could use the special repayment options?

Otherwise of course top conditions
- high equity,
- high repayment,
- low interest,
- low risk after 10 years.

The 15-year loan was also calculated for us and had no advantages. We would pay for those 5 more years of security with worse conditions, which do not make the slightly higher level of predictability appear as the better option.

How much we can specifically contribute to special repayments, I cannot say so definitively. It certainly won't be 5% every year, and at the moment it also depends heavily on my husband's income. But since I will soon be increasing my hours again, there will be more available for that as well. I hope that we can manage 5000 euros annually in the first 3 years. If we ever get lucky in the lottery or receive an unexpectedly large inheritance for the moment, we would not squander it but want to quickly pay off our debts.

So, you’re not supposed to just take the first thing that comes along, we also looked at two other banks. The service there would probably be a bit more "personal," which might not be unimportant in the currently rather unlikely case that you ever have trouble managing.

At both other banks, we were offered a mixture of a "normal loan" and a home savings contract.

We need to use the weekend to really deal with it intensively again. Of course both banks praised their product, sure, but it seems to me that various advisory sites evaluate this mixture with a home savings contract critically.

The main risk generally would be that with an as yet unknown interest rate, you don’t reach the amount saved through the home savings contract and a gap arises?