Construction financing with KFW300 and Z15

Hello everyone, my small family (wife 35 years, child 1 4 years, child 2 10 months, I am 37 years) would like to build a house. Currently, due to the interest rates, this is only possible with a combination of KFW300 and Z15.

We have been living in our 3-room attic apartment rented for 12 years and for the children, we would like a house with a garden. We actually live no differently than during our studies, which is why we have saved about €260,000 in the last 12 years. With some subsidy from my parents, we can buy a 500 sqm plot in our home village (~€300,000).

Since currently only I am working, we are now in the window where we could receive both subsidies. My wife will receive parental allowance for two more months, then nothing for a year until she can work part-time again. I am currently earning €86,000 per year, which with child benefit is about €5,400 net per month. We don't have a detailed household overview but put aside €1,500-2,000 per month. We pay €850 warm rent.

Financially, we can rather calculate with a tight budget because my parents would help us out in an emergency and also my part of the family is rather blessed with "two left hands," so that in an emergency we can also lay tiles ourselves, install drywall walls or chase grooves and lay cables. Since we did this at my parents' house and at my brother's house, I know the double burden, so if possible, I would rather buy turnkey.

For the basement house with ~150 sqm living space, about €500,000 would be available through both subsidies, which is tight but still okay. Then the combined interest rate would be 0.7%, so we could also repay well with €1,700 per month. The rest will be taken care of by inflation and when my wife works again.

Is this a bit naive, or is this still acceptable for you? My wife has now "discovered" the plot after a long search through neighbors in the same village and on Saturday they want to get back to us regarding the price. Buildable plots are unfortunately rather rare here, which is why we usually have prices around €700/sqm. Buying only makes sense if we would also put a house on it.

For the house with a basement and approximately 150 sqm of living space, about €50,000 would be available through both subsidies, which is tight but should still be manageable.

Let's put it this way: €450,000 for 150 sqm of living space plus additional incidental construction costs of €50,000 means you are at €500,000. The outdoor facilities would then have to be sponsored by the parents or still be earned.

For the house with a basement and approximately 150 sqm of living space, about €500,000 would be available through both grants, which is tight but should still be manageable.

But it will not be enough for 150 sqm and a basement. Drop the basement and be happy with a fairly large house. Or cut a few more sqm and also afford a driveway, terrace, and carport.

Then the interest would combined be at 0.7%, so that we could also repay well with €1700 per month.

What was calculated here? What are the fixed interest periods and terms? With such a low interest rate probably with the shortest term and fixed interest period. For example, I would fix the KfW300 loan for 20 years with the longest possible term and adjust the bank's AD so that the fixed interest periods end at the same time.

What was calculated here? What are the fixed interest periods and terms? With such a low interest rate, probably with the shortest term and fixed interest period. For example, I would lock the KfW300 loan for 20 years with the longest possible term and adjust the house bank's loan so that the fixed interest periods end simultaneously.

Read how the OP wants to finance? What kind of house bank loan. For that there is the Z15 loan with unbeatable conditions. And KfW300 is absolutely unattractive for fixed interest periods over 10 years. You can calculate for yourself how the interest rate for a follow-up financing could look to make it worthwhile. A 10-year fixed interest period is a slim 2.1% cheaper. How to combine to get 0.7% interest, I don't know either. But with the rate, there is definitely a good 3% repayment on the total financing. So also good.

What kind of house bank loan is that.

I don't know the bank that offers the Z15. I just thought that since the KfW subsidy has to be applied for by a bank with an AD.

And KfW300 is absolutely unattractive for interest rates fixed for over 10 years. You can calculate for yourself how the interest rate for a follow-up financing could look like for it to be worthwhile.

Honestly, I don't understand that this is completely unattractive. It's just interest rate security. If an AD runs alongside (just an assumption), the fixed interest terms would end almost simultaneously and you can refinance the remaining sum as a whole. Or is this assumption rather nonsense? I'm not sure if I calculated correctly when comparing IR fixed for 10 years versus 20 years with a term of 25 years. After the fixed interest period, the nominal interest rate should only increase by 1% to 1.6%, so you end up with the same remaining debt. Or do you rather consider the interest costs in such a comparison?