Building savings contract or "normal" credit?

Hello everyone!

How do you finance a Passive or Kfw 40 house these days if you don't have much equity (maximum 15%)? Through a home savings contract or with a "normal" loan? What interest rates should you expect for a 20-year term? Which lending institutions do you recommend based on your experience?

Thanks in advance :-)

Best regards,
Chriss

It does not matter what kind of house you build. Primarily, it is interesting how much money you need to borrow. Is your 15% equity 10,000? 30,000? 100,000€?

Building savings contracts are often not so easily comparable to the classic "simple" loan. Often it turns out that they are more expensive. But they do not have to be per se.

The level of the interest rate also depends on many factors. Besides the equity, this can be, for example, the level of the initial repayment. Or the level of the presumed risk that you as a debtor will become insolvent at some point and how high your loan-to-value ratio will be (15% equity does not mean 85% loan-to-value, in the end it will surely hover around 100%).

For 20 years and depending on the situation of the other factors, I would guess well above 3% with a tendency towards 4%.

Also a question that is hardly answerable... depends on the bank, the construction site, and the house itself.

If you want to build right away, in my opinion a building society contract is pointless. Keyword high fees, and hardly any interest.

A 20-year loan will certainly not be cheap if there is no equity. 15% is the minimum you should have before you even think about building. Although a passive house is a whole different matter. You might do better with KfW 70.

You just have to calculate it.

How does it look for you guys.. are the 15% enough to pay for the plot? Or do you already need additional financing... because then you're probably looking at about €300,000 loan and surely interest rates around 4%.

One should only build a passive house or a Kfw40 house if they have the money to spare. It won’t pay off anyway – at least we won’t live to see it (probably neither will the house ;)). No, but seriously: in a Kfw70 house, you already invest quite a bit of technology in the five-digit range (multiple times). The price of a ventilation system alone makes your stomach turn, because the quality of life isn’t necessarily immediately tangible/recognizable. And to sink more money into a passive house, for which you have to pay off a loan (interest! + repayment!)???? I just don’t get people :confused: Crion, why did a passive house attract you if the money isn’t there??? Did the advertising do its part? The Red one isn’t exactly the cheapest otherwise... They all know how to do marketing ;) Edit: I probably overlooked the heading of the question and paid more attention to the content of the text

Hello emer, The Da and ypg!

Thank you very much for your answers!

The 15% equity will hopefully be between 40,000 and 50,000 euros.
The risk of payment default should be rather low due to a permanent position in the public sector.

Generally about equity: Why all the fuss about equity and the at least 15% that one should have? As long as the regular monthly income is sufficient for repayment and survival is more than secured, banks shouldn’t have to worry, right?

On the topic of Passive House vs. Kfw xy: We almost coincidentally had a very interesting conversation today with the managing director of a local construction and planning company. He also tends more towards KFW 70 or 55 rather than a Passive House. We have also reached the point where a calculation is definitely necessary.
I don't quite believe that it will *never* pay off, maybe also because I am naive enough to hope that we will live in the house longer than 30 years, hopefully ~50 years... And it’s rather the other way around: The money isn’t there to pay the high ongoing energy costs in 20 years :) But we will calculate and check whether it really is worth it, the remark is very valid...

The 15% might be enough to pay for the land – depending on where we buy the land and how big it will be. In some places the prices per square meter are simply crazy, up to 1000 euros/sqm in a good neighborhood, already around 150 euros/sqm in what I consider a rather poor "suburban location" (incorporated village). So the search for land will take a little longer and hopefully will result in the equity being enough to buy the land.

Which advertisement is actually meant? Our advertisement is more that a lot is built passively in this area. On the terraces, unfortunately probably soon only multi-storey residential buildings/condominiums, if it were row houses instead, we might possibly be tempted by a hopefully (and here I have my doubts) still affordable end house.

Best regards,
Chriss

In general about equity capital: Why all the fuss about equity capital and the at least 15% that one should have? As long as the regular monthly income is enough to cover the repayments and survival is more than just secured, the banks shouldn’t have to worry.

Quite simply. You borrow €300,000 without having any equity capital, build your house, and after a year it has to be foreclosed for whatever reason. But the house and land only cost €250,000 to build because the rest were incidental costs. So the bank will hardly get that amount. Meanwhile, maybe only €5,000 have been repaid by then. That means the bank still gets €295,000 from you. But they won’t be able to sell it for that much and maybe at best get €260,000 for it. Then you still owe the bank €35,000. Do you still think it was a good idea to go into the race without equity capital? ;)