Building a house - Does it make sense?

Hello everyone,

I would like to hear your independent opinion.

We, 4 people, want to build a house. We have about 150 TEUR equity immediately available and a few TEUR that we want to keep in reserve - just in case. That means we want to buy the plot of land with the equity and still have to finance the house.

We have set a maximum amount of 300 TEUR including ancillary building costs and garden landscaping. According to the first bank meeting, all is no problem.

Now the question - how do you see it: We have a monthly net income of 5,500 euros but do not want to have to change our current standard of living. That means we could pay about 1,800 euros for the monthly installment. Is that realistic? We are in our mid-30s, have 2 children, and do not plan for more. Parental leave etc. is already behind us, but we also do not want to pay until retirement.

Is that feasible or how much extra expenses should be planned after completion?

Many thanks LeiNi

I don't know how high your current standard of living is and accordingly your expenses, but with that income the monthly payment should not be a big problem.

What kind of house were you thinking of? Single-family house, semi-detached house, townhouse? Without basement, partially basement, basement? Kfw 70 55 40? Garage, double garage, carport?

Servus!

Yes, it works... for €1800 you get €392,000 (2.5% interest, 3% repayment)
Best regards.

I would not rely on the opinions of others, but calculate it myself. The WWW helps: Check the current mortgage interest rates (e.g. Interhyp) and calculate yourself with a loan calculator (Google search: loan calculator for annuity loans). A conservative calculation initially works best with a 20-year fixed interest rate. In the end, you can still consider whether you need the long fixed interest period, as banks charge quite a bit for that. (By the way, there is also a tool on the WWW for these considerations, the so-called interest rate scale, which calculates how much interest rates would have to rise for a contract with a longer fixed interest period to be worthwhile compared to one with a shorter fixed interest period.)

And you think that the installment calculator works differently (1800*12/0.055) and that 2.5% interest on the equity ratio doesn't fit? Well then. By the way, I also don't believe that the op seriously wonders if he can afford to finance 300K €.

My post was not a direct response to yours, but to the original post. So I did not want to question your calculation, which is of course correct. Nevertheless, I think it makes sense to do the calculations yourself and to play with the numbers, and I find the tools I mentioned useful for that.