Construction financing - Your experiences and tips?

Are we dealing with satire here when a couple in their early 30s with a net income of 5,500 EUR is advised to pay an installment of 3,000 EUR, which is 55% of their net income? Can one, if in doubt, sue the bank advisor who sells such a ludicrous financing?

I see an achievable installment of €3,000 - lifestyle must be adjusted, but you can live on €2,500 a month. Whether you want that, I don’t know.

Definitely. With the dimensions, it’s somewhere around 160 sqm of living space. Currently, one calculates about +/- €3,000 pure construction costs + additional construction costs (earthworks, etc.) plus garage and outdoor facilities. So that fits. But please reconsider the balcony – from experience, no one ever uses such a thing anyway if they have a garden. It only costs unnecessary money.

Turnkey is gladly without painting and floor coverings. So please check whether those are included or not.

And lastly: Please reconsider without desire for children whether such a huge house for two people really makes sense. There is a lot of unused space. The money saved can be better invested than in ballrooms.

P.S. With a €1,600 installment on a loan of €430k, an annuity of 4.47% is possible. That is extremely low and means only a repayment of 1.5%. Do you really have to blow €4,000 every month? That is a luxury lifestyle – would fit the house. But not the income (like the house).

Thanks for the assessment. The €1,600 loan installment simply corresponds to the widely spread "maximum 30% of total income." At the estimated prices, there is actually 0.00 luxury equipment except for a different staircase included. Regarding the point about the house for 2 people, I agree. It is not very socially responsible in today’s time, where living space is extremely scarce, but politics simultaneously – without considering this – lets everyone build an entire single-family house for 2 people.

An achievable installment of €3,000 would be over 50% of the income; was that meant seriously? With €1,600, only the "cold" rate was meant, without additional costs, i.e., without electricity, garbage, water, property tax, internet, and so on and so forth.

Regarding the construction cost calculation: The €3,000/sqm construction costs assumed must apply to the usable area, not the living area, right?

Regarding the point about the house for 2 people, I agree. It is not very social in today's time, when living space is extremely scarce, but politics at the same time—without considering this—allows everyone into the country to build an entire single-family house for 2 people.

I see here by far the easiest and biggest lever, with which the whole thing becomes much more manageable.

You save about 100k if you build 130 sqm instead of 160 sqm. If planned properly, that's still a huge amount of space for 2 people, right? You don't need children's rooms and apparently you have jobs where you are not constantly in the home office?

Regarding the balcony: we also have one on the bedroom (because it was already there in the existing building). It has been used 0 times so far (we have lived here for half a year) – when we're outside, we're in the garden.

Everything is already planned, but I think shortening the sides to 8x10m would be feasible without intensive redesigns of the rooms. This should then correspond to the 130 sqm living space. Would I need a revision for that? I have a notice with 2 exceptions from the provisions of the BB plan. This notice is based on the submitted plan; subsequent changes would, as I see it, require approval?

I forgot to mention that a €2,000 special repayment per year on the loan is also planned. It probably doesn't improve the annuity significantly. Maybe it is possible to pay more monthly as well; when I research, I always read about the mentioned 30% rule. I don't consider the mentioned 55% to be feasible. There are people who pay 3,000 per month, but as described, in Bavaria most people earn almost absurd amounts.

An affordable installment of €3,000 would be over 50% of the income, was that meant seriously? With €1,600 only the "cold" installment was meant, without additional costs, so without electricity, garbage, water, property tax, internet, etc. etc. etc.

Yes, it is a serious statement. And I come from the perspective that you should still have €2,500 left for living expenses.
We would not finance that high, but you can live on €2,500 – although then you live only for the house.
40-45% of net income as pure annuity (with normal income) is the sensible upper limit to also have some buffer.
Keep a household budget and then you will know exactly your expenses and can make a personal assessment – independently of any flat rates (with a household net income of €5,500 we would set a flat rate of €2,500 for a single person or 50% of net for living expenses – so an installment of 2,750% would be possible – this is also how about 300-400 banks in Germany that work with us do it. So it’s not far from my personal assessment).

Are we dealing here in the realm of satire, when a couple in their early 30s with €5,500 net income is advised an installment of €3,000, so 55% of net? Can you then possibly sue the bank advisor who sells you such a crazy financing?

No, see above.
These are values approved by the banking supervision. With higher incomes, up to 70% of net income for an installment is conceivable.
And now comes the kicker: With these values, we have virtually no defaults. Just from practice.

Regarding the construction cost calculation: The €3,000/sqm construction costs that are assumed should apply to the usable area, not to the living area?

No, you calculate them on the living area.

Everything is already planned, but I think reducing the sides to 8x10m would be feasible without intensive replanning of rooms.

Really? Usually then something no longer fits. Stairs, rooms, doors, etc.

Would I need a Tektur (revision) for that?

That is not enough.

Maybe you can spend more monthly; when I inform myself, I always read about the mentioned 30% rule.

No, usually 40% is talked about.

I don’t consider the mentioned 55% to be achievable.

That depends on your lifestyle.
Honestly: You spend almost €4,000 every month. That is not a down-to-earth life. No offense meant. But I consider an installment of €1,600 too low for the planned financing.

Can you help me with my questions about construction financing?

I would say: with your own estimate of managing 1600€, you hardly achieve any significant repayment over 10 years with construction costs of 600,000€. Haven't you been to a financial advisor yet?

In the end, that's always the case with building, no one knows beforehand what it will cost, but am I roughly in the ballpark or am I way off somewhere?

That's how it is, what confuses me is that you are making an estimate but there is already a building permit. What does the expert say about the construction costs?

with a bit of earthworks

... that's usually not enough. They often cost more than calculated.

Are 33 & 30 years old, no desire for children so far

so far?

Consequently, I see a loan installment of 1,600 € as manageable. Do you see it differently?

Quotes in wrong order: You have a high standard of living that you want to maintain?!

I estimated the construction costs as follows:

The question is what happens if a child arrives in 5 years? Then the installments can’t be paid! I actually don't care socially how many sqm someone builds, even just the two of you, but I find 600,000€ for a house truly expensive, which does not necessarily fit salaries of 5,500€ if a child comes. How you have split your costs is not visible. But I can imagine that either there is still “saving potential” for a higher repayment rate, or I actually advise adjusting the house size. There are indeed some extras listed in the text that make the house quite expensive: balcony, double garage, balcony. The 3,000€ construction costs per sqm as a calculated value relate to ALL sqm of the house within the thermal envelope, provided there is no basement construction or similar.