Construction costs are currently skyrocketing

I just crudely calculated with figures from 2 years ago and today.

Just calculate much simpler with 1% interest at the end of 2021 (+2% repayment) and today 4% interest and 2% repayment. With the same prices, the rate for the home builder or buyer doubles. There is a reason why, two weeks ago, the head of a real estate financing unit at a bank told me that "his" 40 financing advisors are currently only being paid to twiddle their thumbs and shake their eggs.

Sorry, but I still consider 500k pure construction costs to be too much. Additionally, comparable annuities would be interesting. But then with different interest rates. With one financing, you are at just over 3%, with the other at 5.5%. I find that hardly comparable.

With higher interest and the same repayment, the term decreases, so the comparison doesn’t make sense to me. Furthermore, the construction increase is not only explained by rising material prices but also by the elimination of various subsidies. (kfw40+, bafa subsidy for WP reduced, wallbox, battery storage, etc.) That is more realistic than one thinks

With higher interest and the same repayment, the term actually decreases, so the comparison doesn't make sense to me.

Of course not for comparing interest costs over the term. But to be honest, that’s also completely irrelevant.

As a prospective homeowner, I’m not interested in what I’ve paid after 35 years (hardly anyone actually looks at that), but whether I can afford the house NOW. And within three-quarters of a year, we’ve seen a doubling of the price = monthly payment for the same house (assuming unchanged costs). Then it becomes hypothetical what happens over the term, because hardly anyone can overcome the hurdle of the loan agreement anymore unless they can mobilize substantial equity or significantly lower their expectations.

Sorry, but 500k pure construction costs I still consider too much.

I don't think so. That is only just over 3000€/sqm for 160sqm. A value that has long been reached in the south. The main problem, however, is that within less than 12 months a rather comfortable 4% repayment has turned into at best a 1% repayment.

One must say that it used to be normal to pay for the house twice because of the interest. Recently, money was simply very, very cheap.

Additionally, comparable annuities would be interesting. But then with different interest rates. One financing is at just over 3%, the other at 5.5%. I find that hardly comparable.

Well... I'd say something like 1% interest + 2.5% initial repayment definitely sounded like a not particularly unusual setup until last year. That would be a 3.5% annuity. But as of today, you simply cannot conclude financing with a 3.5% annuity because the interest rates already exceed that. For quite a while, banks actually preferred at least 2% repayment, although I can well imagine that this was partly due to the low interest rates (and the term with 1% interest + 1% repayment is just forever), maybe that is seen differently today. We currently have the "nice" comparison with a colleague of mine. He took out financing of 480k about a year ago and pays around €1400/month (probably very close to the 1% interest + 2.5% repayment). We now pay around €2150/month for 460k (conditions from last month, 3.59% interest + 2% repayment). So despite a €20k lower loan amount, we pay over €700 more per month. He had the option to say "oh well, we can also afford €2000/month, I'll set the repayment higher," but the other way around, it simply wasn’t really possible for us. So I'm not completely sure, maybe the bank would have also gone along with 1% repayment, but we had decided not to go below 2% to eventually pay down the debt mountain... That means we rather looked at where the rate would be and if we could still afford it, and less a "what is actually our desired rate." Internally, there was already a maximum that we wouldn't go over. If it had been about the actual desired rate (e.g. where would we have landed if the interest rates weren't what they are), we would have been lower.