It is possible to split the home finance between two loans. However, this consideration is not always really sensible. If you decide to split your loan, the two loans would usually only differ from one another in terms of their terms. A shorter term is rewarded with a lower interest rate, so that you achieve interest savings. However, this variant is only worthwhile if you can use your own funds to repay the loan with the lower borrowing rate after the end of the term, so that no follow-up financing is required. However, the different terms also involve a certain risk. You have to keep an eye on when and for which loan a follow-up financing is due.
It becomes clear: With the same loan amount, the interest paid on the split loan is around USD 14,000 less than you would take up the entire amount in a loan. The example of two classic annuity loans is only worthwhile if the lower loan, the remaining 42,335.19 dollars, can be repaid in full after the interest rate has expired. This is the case, among other things, if you expect an inheritance or gift at the same time. Subsequently, only follow-up financing is required for the one loan. If you cannot finance the remaining debt of the lower loan from your own resources after the fixed interest period has expired, the distribution of the loan is not worthwhile.
In addition to the option of dividing the loan into two classic annuity loans, there are further combination loan variants:
- Annuity loan and variable loan
- Annuity loans and lender bank loans
- Annuity loans and home savers
Annuity loans combined with variable loans
Another possible combination of two loans for construction finance is an annuity loan and a variable loan. The classic loan is secured primarily in the land register. The variable loan is secured secondarily. The majority of the loan amount is made up of the annuity loan. It makes sense to finance around a third with a variable loan. In contrast to the annuity loan, no fixed interest rate is agreed for the variable loan. This makes it very cheap, but it is also risky, because it adapts to current market values and is billed every three or six months. This combined loan is very flexible, but is only worthwhile as a financial interim solution and is absolutely not recommended for a long term.
Building finance combined with lender bank loans
You can also benefit from the favorable financing provided by the Kreditanstalt für Wiederaufbau (lender bank) and combine your construction finance with a lender bank loan. Your fixed interest rate is fixed for up to ten years. Some programs also offer the option to start repaying five years after the loan has been paid out. The lender bank loan must be applied for at the same time as the building finance.
Combine home savings products and home finance
You can finance part of your loan with a home savings loan. In contrast to a conventional building society contract, the loan is immediately available to you with this form of building society contract. You then pay a minimum amount of 40 or 50 percent into the building society contract and at the same time pay interest on the loan that has already been paid out. Only after you have paid in the minimum amount of savings do you begin to repay the home savings loan. The advantage of an instant home loan is that you secure today’s interest rates. This is particularly useful when building rates rise again. The disadvantage: the building societies charge you a closing fee and account fees.