Building a house financially feasible or a pipe dream?

I don’t see that either. The supposed equity in the parents' house evaporates. On the other hand, there are 2-3 children and the obligation to take the parents into the new building free of charge. That doesn’t fit with this income. Please detach yourself from the perception that your income is (above) average and that what you intend to do is also average. A house with 230 sqm is more than above average, especially if it is supposed to have 2 residential units.

The right of residence does not appear anywhere in the land register. It is an agreement in the purchase contract. The house was transferred to me for a small amount (actually, essentially for €0), in return it was agreed that both parents could live in the apartment rent-free for the rest of their lives.

But what about the loans then? Only for the renovation?

With the loans, I have almost completely gutted and renovated the house.

New heating system including underfloor heating on the upper floor.
New heating system including partial underfloor heating on the ground floor.
Roof insulated and converted into a study, including underfloor heating.
Floors (screed) redone in almost the entire house.
Stairwell completely redone except for the staircase (which was restored).
Electrical wiring and water pipes completely redone.
Almost all windows in the house replaced and additional roof windows installed.
Bathroom on the upper floor completely redone.
Ceilings on the upper floor completely redone.
Floor coverings on the upper floor completely, on the ground floor partially redone.
External insulation applied.

The only thing that was not done is the roof, which according to the roofer will definitely last another 30 years. And the garage roof will have to be renewed in a few years, as it sometimes leaks during heavy rain.

And I pay for my parents' living space, i.e., I receive no rent for it. They pay the utilities and everything else themselves, and also support us in other areas that would otherwise cost us money and/or time. My father acts as the caretaker and does almost everything himself. My mother takes care of the children so that my wife can go to work without us needing two daycare places costing 700€...

So I don't see this as "uneconomical," not even without the family perspective.

Oh, but be sure to include the daycare in your financial planning. You don't want your mother to be unable to babysit in 2 years because of her hip. Then you'd be in a really bad spot. Go to the bank and find out what you would get with the statement of what you can pay monthly at most.

The further problem I see is that the ongoing or sporadic financial support from the other parents will in no way be taken into account by the bank. They see the living costs of 5 people and an income of 3000 or 2 salaries of 4000. This must then fit with the loan. If you start talking about a second residential unit there, they will get red ears.

Could you still sleep peacefully with a €450,000 loan?

In 2 years the children will go to kindergarten. It costs 90€ per month per child here. The daycare center is expensive with 300€ per child plus a diaper allowance, meal costs, etc.

Ok, I think I expressed myself poorly: Children under 3 years have to go to the nursery – which costs 718€ for 2 children here. From 3 they can go to kindergarten, which costs 90€ per child for half-day, and I believe 125€ per child for full-day.

I understand that the bank does not recognize the parents' benefits. However, they also cannot include the parents in our household planning – or they would have to include their income (pension) as well, then it would be a break-even calculation.

With 450,000€ debt I could sleep peacefully. I know that if something happens to me, everything still won’t fall apart.

I have secured the loans through RLV, and two further KLVs that would fully protect my family in case of death.

I have a disability insurance, which together with the company disability insurance completely covers my monthly expenses as they are today. And if I really became disabled, other factors would also drop out of the household planning (almost 100km daily commute, need for two cars, ...)

Unemployment as a trained computer scientist with work experience in several subfields of computer science and very good networking – if it ever really came to that permanently, the house would be gone – but then probably no one else could afford it either.

I have a top employer who basically nips such fears in the bud with additional social benefits. In case of illness, even after 6 weeks we continue to receive up to 90% of net income for up to a year. We get a company pension scheme far above the tariff as an additional benefit (which does not come out of the salary). Also a company disability insurance.

So: Yes, I feel secure, even though I have 500,000€ debt, which as of today I am able to have paid off by retirement.