Buy or continue renting

Hello,
my wife and I are considering whether to move into a rental apartment once again or buy a house.

Our situation is as follows:
HE (25): €2,500 net, permanent contract, and salary increases fixed for the next 4 years so that in 4 years it will be €3,200 net. After the 4 years, there will be a larger salary increase which is subject to negotiation.
There are also expenses/bonuses etc. on top, which we do not want to count on as fixed. About €500 extra per month.
SHE (25): Currently parental allowance €500 and afterwards at most a Midi-job with €800 per month.
We have 1 child (3) so far and the second one is coming in October.
So two child allowances.
Secure income: €2,900 + €200 more every year.
Variable: €1,300

Equity will be enough for incidental building costs.

Currently we live in an 80 sqm apartment with 3 rooms that costs €600 warm, but it is not in the best condition. (Fear of mold formation)
We have seen another apartment, 4 rooms 110 sqm for €1,000 warm.

Our monthly expenses including rent and food etc. averaged €1,600 over the last year. Credit for fridge and dishwasher were included in that.

We are asking ourselves now whether it is worth to rent again for 4-5 years or rather buy something.

Regarding a house, a semi-detached house + garage with 120 sqm with 3 bedrooms without a basement would be enough for us. We want a plot of about 200 sqm because here in Bonn and surroundings you pay between €200-400 per sqm.
For that, very energy-saving is taken into account.

The exterior work on the house would be done by ourselves (brother-in-law is a landscape gardener) as well as painting and floor work. Mostly also the electricity (father-in-law is a trained electrician but does not work in that profession), but I would prefer to have the fuse box done by a company due to warranty. Heating and sanitary also by a professional.

I roughly calculated about €380k total construction costs including everything. Is that too low or too high?

Calculation:
€380k - €30k (incidental costs)
= €350k - €50k (KFW loan)
= €300k - €80k (NRW.Bank) not usable for much longer due to income limits.
= €220k bank loan

Monthly burden
KfW loan 2.53% 20 years, first 3 years no repayment
NRW.Bank 1-5 years 0.5% then 3.5% €100
Bank loan 3.5% over 20 years €790 per month
+ incidental costs about €300
= €1,200 for the first 3 years

I just thought I would rather pay €200 more per month for a house than give the money into the hands of a landlord.

I hope all information is given and you can give us helpful tips.

It is also important to know whether you have equity. You should have around 20-30,000 in cash equity in the bank during the construction phase. On the one hand, because you are not allowed to buy, for example, the kitchen with a construction loan, and on the other hand, you do not want or cannot run to the bank for every invoice.

The more equity, the better the loan conditions.

So, to build or not: I would say that your income is tight but could be sufficient if there is enough equity. If you actually need to finance 380,000 in full, it will not be enough.
You definitely should not buy things on credit anymore, because it can often get tight during and after the construction :)

We are financing 250,000 with a monthly burden of just under 1,000€.

Regarding the plot size: 200 sqm will not be enough. Unless the development plan requires no distance to the neighbor or to the street. Pay attention to parking regulations!
Plots between 250 and 500 are traded here, and a normal plot for a semi-detached house is about 350 sqm. I guess there is a reason for that. We moved a bit out and got 720 sqm for the price of 300 in the city. Maybe an option.
Or inquire about planned terraced houses. They are usually cheaper than building a semi-detached house yourself.

How are these 380k composed?

You already mentioned 30k in additional costs, but how much of the remaining 350k is intended for the land and how much for the house?

Monthly burden
KfW loan 2.53% for 20 years, the first 3 years interest-only
NRW.Bank 1-5 years 0.5%, thereafter 3.5% 100€
Bank loan 3.5% over 20 years, 790€ per month
+ additional costs approx. 300€
= 1200€ for the first 3 years

For the bank loan, I come to at least 825€ with 1% repayment...

Furthermore, I hope you are aware that 1% repayment is not really "optimal"... if you are sure that you will have significantly more money available in a few years and you really make sure to make special repayments, it can work... otherwise comes the big awakening when the fixed interest periods expire and you have barely repaid anything...

20 years fixed interest rate with KFW? I thought they only offer 10 years. Or are those not efficiency loans?

A grace period on repayments can be quite nice, but it backfires if you don’t make use of that time.

Hello,

From the house perspective, a semi-detached house + garage with 120 sqm with 3 bedrooms without a basement would be enough for us. We want about 200 sqm of land because here in Bonn and the surrounding area, you pay between 200-400€;;/sqm.
Therefore, very energy-saving considered.
(...)
I roughly calculate about 380k€ total construction costs including everything. Is that too low or too high?

We are currently marketing a comparable project in Cologne-Grengel, so I can tell you quite precisely how much you have to calculate for your semi-detached house including garage and land as well as ancillary construction costs:

Semi-detached house 6.95 x 11.00, plaster construction with partial color
Two-story on slab
Expansion reserve in the attic
Ventilation and air-water heat pump included
without painter & floor coverings - € 198,000.00
Finished garage 3 x 9
with sectional door - € 10,230.00
Private land 280 sqm - € 89,000.00
Ancillary construction costs - € 35,000.00
Painter & floor coverings - € 20,000.00
Outdoor facilities - € 15,000.00
Reserve for extras - € 20,000.00

totals € 387,230.00.

Now you just need to replace the land price with your preferred land in Bonn and you will know how much money you have to invest ;)

Kind regards

@ Der Da
Equity is about 30k€, with a home savings contract maturing in 3-4 years for 60k € (30k paid in + 30k loan).
By semi-detached house I mean a kind of townhouse. My aunt has a semi-detached house with 200sqm of land, and that would be enough for us. My cousin has 400sqm and that's just too much space for me; you have to think about later too. And I don't feel like mowing 100sqm of lawn and maintaining flower beds at 70. A small garden is enough for me.
Moving further out to the countryside is also an option, but only in 2-3 years when the little one is out of kindergarten. Because changing kindergartens isn't the best.
And with the 380k I mean only land + house + materials for garden and floors + walls.
And I won’t buy a kitchen for more than 10k €.
@ Shism
If it fails over 30€ or even 100€, then you shouldn't build a house.
We have 1000€ fixed costs per month without rent (insurance, contracts, food, and gas). So there’s still at least a 700€ buffer.
@ Bauexperte
Thank you very much for the breakdown!
I think I’ll just drive to the model house village in Frechen and have a look to see how much our "dream house" costs.
Whether it’s "brick by brick" or prefabricated house is not so important to us now. Except if the extra cost for "brick by brick" isn’t too big.
If it costs 500k including land, we’ll keep renting for now, save some money, and enjoy life a bit.
Although personally I’m not so opposed to a condominium, but Mrs. Chancellor said: "And where are the children supposed to play ball then?"
At 25 you still have some time.
I won’t give up "luxury" for 20-30 years just to buy a house.