Build a house, buy a house, or...?

Wow, first of all, many thanks for the many responses. I need to look into the Riester pension, I have no idea about it at all and wouldn’t know how to approach it exactly. Google currently gives me too confusing information on that. I signed a building savings contract [Bausparvertrag] two years ago, but only to collect the capital-forming benefits, and only 40 euros per month are deducted directly from my salary. However, this is just a building savings contract with a sum of 10,000 euros. Should I therefore take out another one with a higher building savings amount? We have already bought the plot of land, we paid 15,000 euros ourselves, the rest was a gift from my parents. So we don’t have to pay anything back on that. Today we are going to a model house exhibition of a prefabricated house provider (Fingerhut) and just look at a house. Regarding my job, something might also change in about a year. Currently, I commute 120 km per day, and a transfer to a school near my home would significantly reduce my monthly fuel costs. If we build new... How long would you still wait to save equity? How much money should we set aside? A school colleague of mine built new, prefabricated house plus land and took out a loan of 400,000 euros with very little equity. I don’t think I could sleep well at night with that. A prefabricated house would probably suit us better anyway, since I’m not unskilled with tools, but beyond floors and walls (wallpapering, painting) I probably can only do very little myself.

A house is always finished when you move in, traditionally built houses are not delivered as shells either, and prefabricated houses are, in my opinion, too expensive. but compare for yourself. Increase your building savings significantly to 100,000 and save it in 1,000 installments. Use financing building savings, so hardly any credit interest, but also secured low debit interest. You may then borrow 150,000-200,000 at 1.4% later. That can be really great in 8 years. You will see then.

A house is always finished when you move in, traditionally built houses are not delivered as just a shell either, and prefab houses are, in my opinion, too expensive. But compare for yourself. Increase your building savings plan significantly to 100,000,- and save it in 1,000 installments. Use financing building savings, so barely any credit interest, but also a secured low debit interest. You can then borrow 150,000-200,000 at 1.4% later. That can be really great in 8 years. You will see then.

I think then I have to take out a new building savings contract. The one I have is for the VL investment and housing construction premium and, if I read correctly, may only be saved with a maximum of 43 euros per month. As I said, unfortunately, I still have very little knowledge about it.

We will definitely compare the different construction methods, traditionally built and prefab construction. Thanks!

Why do you want to wait so long to start building? Of course, it's a personal risk assessment, but your conditions are quite good now. I think you shouldn't act too cautiously. It's a typical German trait. Of course, weigh all risks, but don't overestimate the risks. A house with a garden is the best thing, especially when you have small children. Door open, kids outside, and with a coffee on the terrace or when they are older, tinkering in the house quietly. If you only build in, for example, 8 years, your kids might play outside for 5-6 more years. After that, the garden is mostly used just for barbecues.

You can secure low interest rates with a home savings contract. But you can get those rates directly now, and construction prices will probably be different in 6-8 years than today. And if they only rise by 15% over those 6-8 years (which would be very little compared to recent years), then calculate what your savings capital will still be worth by then. It will melt away due to the price increase.

Is your wife's re-entry into her job secure? You want to build in RLP? Here, kindergartens are free from age 2 (except for meal contributions), so those costs don't really matter. If yes, I would proceed or explore as follows:

You have a paid-off plot of land. That counts as your equity. Let's put aside the remaining equity as a buffer. I would now look around to see what a house would cost in your region. Visit model house parks. Invite 2-3 providers to your home and have them calculate a floor plan. Also go to local general contractors. Your land price suggests that costs in your area might not be too inflated yet. Then see what financing you need. Then I would calculate different scenarios. Excel is your friend. And calculate whether building equity really outweighs rising construction costs, higher interest rates for part of the loan, and lost years in your own house with a garden.

I think then I have to take out a new home loan savings contract. The one I have is for the VL investment and home construction premium and may, if I read correctly, be saved with a max. of 43 euros per month. As I said, unfortunately I still have very little knowledge about it.

We will definitely compare the different building methods, traditional masonry and prefabricated construction. Thanks!

Do you even get a home construction premium? As soon as you earn more than 51,000 euros a year as a couple, you don't get any more.

Well, if I were you, I would start building the house right away. You will have no problem getting a good loan, and I wouldn't want to hope that the interest rates and construction costs haven't eaten up my additionally saved equity if the building only starts in a few years. If you start looking for a suitable building partner now, you won't start earlier than in a year anyway. During that time, you can save as much money as possible and then pay for new furniture, kitchen, etc. with it (I wouldn't include that in the financing).