Your opinion: Is TEUR 370 financing feasible?

I suggested to my boss today to adjust my salary with each child. He said yes, downwards... I would then be on parental leave even more often and even more notoriously sleep-deprived due to sleepless nights .... (of course, all in jest)

I have an extremely family-friendly boss, one you probably have to search for a long time, even though every vacation day really hurts at our 10-person small company. Because someone is always missing when a position is not filled. But when I hear about working conditions here and know that you are completely independent of economic developments, I wonder why I didn't become a civil servant ;)

Believe me, the path there was not easy for me at all and took 8 years. The public sector still offers enormous advantages for people interested in family and children, which cannot be compensated by the salary advantage in the private sector.

Hello,

I haven’t read everything in detail:

About 2 months ago, I took out a loan of €350,000 (sole borrower, net salary €4,000)

The loan consists of a Kfw70 loan 10/2/10 €50,000
and a Riester building savings contract €300,000 with 2.89% / 2.7% (savings phase / repayment phase)
approx. 25 years term with 100% repayment

In the first 2 years we have a burden of approx. €1,550, afterwards it gets a bit more expensive due to KFW.

I keep reading here that Riester is too risky and has too many disadvantages, but this has to be considered on a case-by-case basis.
Many disadvantages can be managed with prudent planning.
For us, the variant brought the following advantages:

Secure installments for 25 years with 100% repayment
Low loan interest rate and therefore 5 years faster completion.
Free special repayments of any amount (from the repayment phase, before that 5%)
The possibility to adjust the monthly rate (down to €1,200 only for the building savings contract of course) upwards open.

If there are more questions, PM me

Regards

You must not forget the subsequent taxation in your version either. If you calculate it as a normal annuity loan, I come to a monthly rate of €1430 (so about €1500) for a full repayment borrower with a term of 25 years, plus KfW. In return, you have saved the subsequent taxation from Riester. It should therefore be cheaper, also be paid off after 25 years (the same security), and the banker has not filled his pockets...

Your statement is not entirely correct, at least not in my case. Because I would never have gotten a normal loan with these conditions. We took the amount of the deferred taxation into account and were still cheaper in the overall interest expenses than with a normal loan. Why the interest rate on the Riester home savings contract is cheaper than other types of loans, I cannot explain. So far, I have not seen an annuity loan with a 25-year term at 2.8% anywhere.

Your statement is not entirely correct, at least not in my case. Because I would never have gotten a normal loan with these conditions. We took into account the amount of deferred taxation and were still cheaper in total interest expenditure than with a normal loan.

Why the interest rate on the Riester home loan savings contract is lower than other types of loans, I cannot explain. So far, I have not seen an annuity loan with a 25-year term at 2.8% anywhere.

Hello

unfortunately, you have a misconception. You can’t just say Riester home loan savings contract 2.8 compared to, for example, annuity 3.4 in a blanket statement.

You have to model it in Excel to assess it objectively. Basically, it is the case that you also lose money during the savings phase (because the interest is low). With a classic loan, every euro repaid acts as a compound interest effect.

We decided against it because we wanted to be finished at some point and received a great interest rate. Otherwise, I might have looked at the Riester again. Especially since with such a model and many children, there is a real advantage in subsidies.