Construction financing over 700k - Is the offer okay?

Why does no one actually intervene here? The €3700 x 2 only applies if both work full-time. They don’t, the woman is on parental leave, and we don’t know how much parental allowance she receives. A second child is also planned, which will once again tighten the income.
Nevertheless, a loan of almost €650k is on the table. The installment seems to be moderate mainly due to the low repayment and consequently a high remaining debt.
At least, civil servant teachers and apparently assets in reserve that are not meant to be used... That is naturally positive.

Thanks for the hint.
Child benefit has not been considered in the calculation yet, parental allowance plus the woman’s part-time work amount to €2100 net for the next two years. With the second child, the same scenario would repeat.
Overall, therefore, always around at least €6000 net.

That is precisely why we wanted a pain threshold of an installment of €1800, but with long-term interest rate security.

Maybe someone also knows banks where such a model can be implemented more flexibly with our very reliable creditworthiness.

There is still a €50k portfolio in reserve, which I definitely do not want to liquidate because it will bring a significantly higher return in the coming years than saving costs through a better interest rate would. (Please, no fundamental discussions. :)

What is one supposed to say here? Of course it is tight. The two teachers have to decide for themselves.

Next week Dr. Klein will get in touch...

What exactly did you inquire about? 30 years? That "costs," if anyone even offers it. Long duration is a matter of definition! 700 k€ and here a paltry (for many normal to high) 1800€ just don't match!

20 years would be enough for us, only half the amount over 10 years is too risky for us.

I noticed it immediately as well, but lately such calculations have been discussed here more often, and any hints that a lot of window dressing is going on are brushed aside in view of the panic among prospective homebuyers. So I refrained from making the remark.

Yes, it is already apparent that a peak has simply been reached. Even a couple of double-A13 teachers like here are now slowly falling out of the pool of potential buyers – unless generous equity donations are available.

As DINKs, you would just about still be within range here – with perhaps €7,000 net (after private health insurance) you can still approach a €700,000 loan – barely. With no significant equity, low repayment, and the attempt to quickly snag the "safe" return via ETFs & Co. on the side, you can sense what might happen here in 10 years if interest rates rise significantly. Then even having civil servant status won't help when the installments increase and today's book values melt away.

Therefore – calculate and see if you can get your project through well today with today's conditions + fixed interest periods. You have to have almost everything done in 20-25 years. Large residual debts at certainly higher interest rates are not very nice when you have also paid peak prices for land and construction. Don’t forget, real estate prices depend on the timing of interest rates.

so with the current income of 3700 + probably 1800€ parental allowance, it is really very tight...

but well, I have already done financings with 1.5 million in Hamburg, where the bank gave us 10 years without repayment (there was enough wealth in real estate... then in 10 years an apartment or something is sold off, and that repays everything)...

with 700,000€ acquisition costs (excluding incidental purchase costs), it is already advisable to bring in the 70,000€ equity. On paper 90% financing (even if according to the bank's calculation more like 100%)
20 years, where you can adjust the repayment between 1% and 10%, is at 1.56%, with regional discount (don’t know where you are from?) you might also get 1.46% or even 1.36% (for that 20 years of complete interest rate security!)


VR banks will make a MIX here, i.e. 60% run-off (their valuation) is done via Schwäbisch Hall for 20 years, the rest is financed by the VR itself.

BUT should you really choose such a MIX of 10 + 20 years?

then 2 things happen:
1) the interest rates are still favorable after 10 years = you cancel the 20-year and finance everything via a new bank
2) the interest rates have risen, the 20-year fixed interest period is still running, but you are forced to extend the 10-year via the VR bank because a change would mean the new bank would have to go into second rank (everyone dislikes that, and only with an interest surcharge!)

therefore I always say:
either 10 years with much higher repayment, or directly everything on 20 years!!!