Can we afford the financing?

Hello,

we would like to buy a terraced house. The financing term is estimated to be about 30 years. The monthly payment for the financing is about €860 per month. I have the OK from the bank.

Today I sat down with my partner and we made an Excel sheet with all our expenses and income, as well as adding all insurances + additional costs. We both still live with our parents. The fixed expenses are the ones we currently have. The additional house costs and insurances (from point 3) are estimated now and briefly compared on Check24. The annual costs have been converted into monthly amounts. The income is calculated at minimum because we have hourly wages and our salaries vary. The 100% MINIMUM income is included here. Additionally, there are shift allowances/subsidies etc. Also, 3x a year bonuses of over (additionally) €2000 net. As mentioned, all calculated at minimum!

This is for a 2-person household - no children - approx. 100m² living space with garden.

The following resulted:

Income Man
€1,700.00 Minimum wage without bonuses/allowances/bonuses
Average is €1,900

Income Woman
€1,300.00 Minimum wage without bonuses/allowances/bonuses
Average is €1,400-1,500
Total income €3,000.00 NET

POINT 1 Fixed expenses that we already have Man
Monthly
Legal expenses insurance €24.31 BOTH INSURED
Supplementary dental insurance €20.80
Car insurance comprehensive €75.32
Occupational disability insurance €20.00
Mobile phone contract €60.00 Reduce on contract renewal
R+V Riester pension €25.00 Possibly cancel
R+V pension insurance €30.00
Standing order friend
€35.00
Club €2.50 // €30 per year
Car tax €8.00 // €96 per year
Auto club membership €5.30 // €64 per year – BOTH INSURED
TOTAL €306.23

POINT 2 Fixed expenses that we already have Woman
Monthly
Car insurance comprehensive €71.76
Occupational disability insurance €20.50
Supplementary dental insurance €20.80
Mobile phone contract €35.00
Estimated car tax €8.00 // €96 per year
Club
€2.50 // €30 per year
TOTAL €158.56

POINT 3 Fixed additional house costs and insurance Monthly - taken over by seller and Check24 comparison etc.

House loan €860.00
Electricity €75.00
Water €22.00 // €65 per quarter // €260 per year
Garbage fees €20.00 // €200 per year
Heating gas? €80.00 // €960 per year
Building insurance €20.00 // €250 per year
Risk insurance €26.00 BOTH INSURED
Personal liability €3.50 // €42 per year
Property tax yearly €8.33 e.g. €100 per year, still unknown
TOTAL €1,114.83


[B]Other expenses
Fuel* €360.00 3x fueling per person per month
Internet €35.00 e.g. O2 VDSL
License fee (GEZ) €18.00
Weekly groceries €200.00 €50 per week
Savings rate €200.00 Into daily money account (security, repair)
TOTAL €813.00
Total income €3,000.00
Total expenses €2,392.62
Leftover approx. €607.38

*For fueling, we calculated that we both together refuel about 4 times a month. I calculated here with 6 times a month.

1.) With the €200 savings rate, about €600 remain for living according to the calculation.
2.) Are the additional costs + insurances in point 3 well estimated? Or exaggerated? Or too little? Or is something missing?
3.) Can anything be omitted, which is really not needed?

What do you think, can I take this step with my partner with the house purchase? Or is it too risky?
We have about €10,000 as a buffer in a daily money account.
As said, I converted things that occur e.g. once a year into monthly amounts so that they are already set aside when the annual burden comes.

Thanks for your suggestions and advice in advance.

POINT 1 Fixed Expenses Man Monthly Legal expenses insurance €24.31 BOTH INSURED <- if you like it that way Dental supplementary insurance €20.80 <- €240 per year, what does the insurance pay? Car insurance comprehensive €75.32 <- new car? Then okay - at least a proud €900 per year Disability insurance €20.00 <- okay Mobile phone contract €60.00 Reduce at contract renewal <- can save a lot R+V Riester pension €25.00 Possibly cancel <- after the initial fees are paid you can also let it run ;-) R+V pension insurance €30.00 <- what does that do anyway? But in doubt same comment as the Riester pension Standing order friend €35.00 <- ? Club €2.50 €30 per year <- okay Car tax €8.00 €960 per year <- assume you mean €96 Auto club €5.30 €64 per year – BOTH INSURED <- what do they insure? TOTAL €306.23

POINT 2 Fixed Expenses Woman Monthly Car insurance comprehensive €71.76 Disability insurance €20.50 Dental supplementary insurance €20.80 <- as above Mobile phone contract €35.00 <- still expensive I think - but okay, with phone leasing Estimated car tax €8.00 €96 per year Club €2.50 €30 per year TOTAL €158.56

POINT 3 Fixed House ancillary costs and insurance Monthly House loan €860.00 Electricity €75.00 Water €22.00 €65 per quarter // €260 per year Waste fees €20.00 €200 per year Heating Gas? €80.00 €960 per year <- depends on the house - €80 is already a lot for a new building Building insurance €20.00 €250 per year Risk insurance €26.00 BOTH INSURED <- Against what risk? Private liability €3.50 €42 per year <- What does that have to do with the house? Property tax Annual €8.33 e.g. €100 per year, still unknown TOTAL €1,114.83 <- depending on the size of the property

1.) With the €200 savings rate in the calculation, about €600 remain to live on. Not very much - we calculated €500 per person - what about the children? 2.) Are the ancillary costs + insurances well estimated in point 3? Or exaggerated? Or too little? Or is something missing? Estimates are okay - somewhat dependent on the size of the house. A good guideline is sqm*€2 3.) Can something be left out that you really do not need? see the comments in italics

Hello BeHaElja,

did you also see the item "Other expenses"?

Dental supplementary insurance €20.80 <- €240 per year, what does the insurance pay?

That is the maximum from the insurance.
90% reimbursement
for implants and dental prostheses
100% reimbursement
for prophylaxis measures and for inlays and onlays

Car insurance comprehensive €75.32 <- new car? Then okay – anyway a solid €900 per year

Yes, we both have almost new cars (paid off)

Mobile phone contract €60.00 Reduce upon contract extension <- you can save drastically

Definitely. But €20 for phone rental is included. Still, you can easily save more.

R+V pension insurance €30.00 <- what does that do? But probably the same comment as for the Riester pension

That is a private pension insurance. I don’t know the exact benefits now. Both have been running for over 2 years (the Riester pension longer)

Standing order to buddy €35.00 <- ?

Can be ignored, only 1-2 months left

Car tax €8.00 €960 per year <- assume you mean €96

Correct. Sorry!

Auto club membership €5.30 €64 per year – BOTH INSURED[I] <- what do they insure?

[/I]
ACE, so like ADAC. Our car insurance does not have roadside assistance.

Heating gas? €80.00 €960 per year <- depends on the house – €80 is already a lot for a new build

Built in 1967 - about 100 m² living space.

Risk insurance €26.00 BOTH INSURED <- Against what risk?

Until the loan amount is paid off, in case someone dies.

Private liability €3.50 €42 per year <- What does that have to do with the house?

Nothing, it comes under "Other expenses"

TOTAL €1,114.83 <- depending on the size of the property

What does that mean or what is it referring to?

Not so much – we calculated €500 per person – what about the children?

Yes, it’s not much, did you also look at "Other expenses"? Most of it is already covered or calculated there.
Still, it’s not much. I would have tended towards €1000. We don’t have children yet. I am aware that with a child the first year will be very tight (partner would definitely go back to work after 1 year).

I’m unsure whether we should dare or not. I mean, after all, here in Ba-Wü, rent is not much cheaper either........

Two things come to mind here: 1) Riester pension contracts can be suspended from contributions at any time. Especially if the initial costs have already been paid, cancellation does not make sense. 2) Are you sure that your wife CAN go back to work after a one-year maternity break (keyword: childcare, working hours, place of deployment) and also WANTS to (once the baby is there, many people change their minds about when a child should be cared for by others)?

How much do you save each month? And that calculated over a longer period? 600 € doesn't sound bad at first - if, for example, there are maintenance costs for the car,.. then you can't go to the cinema / eat out for the whole month, etc. With a child, 600 € is nothing and 200 € for groceries / drugstore is too little. But some manage to get by with even less money. It depends on personal needs. Therefore: How much are you currently saving each month?

1) Riester pension contracts can be paused from contributions at any time. Especially if the upfront costs are already paid, cancellation doesn't make sense.

The thing about pausing contributions is true.

2) Are you sure that your wife CAN go back to work after a one-year baby break (keyword care, working hours, place of deployment) and also WANTS to (once the baby is here, many change their minds about when a child should be cared for by others)?

That may be so, that is true.

How much do you set aside monthly? And calculated over a longer period?

In the calculation above, 200€/month would be transferred to a daily allowance account as a standing order.

I have a gut feeling :-)