Equity contribution in construction financing

This is how it went with us: the architect gave me a construction cost estimate for each trade. Material costs and wages were listed there. We then shortened this overview a bit, because in some places the amounts were somewhat overestimated. In the end, it said something like 140k [Eigenleistung] and about 100k material. With that, we went to the bank, managed to convince them that we could make do with the money, and got our loan.

The Ing-Diba credited us a flat rate of €5,000 for self-performed work. In reality, we did significantly more:
110 sqm of parquet flooring installed
Tiled the basement ourselves
All painting work
Entire garden (very elaborate with irrigation system, etc.)
Built the masonry stove ourselves (a company would have charged nearly €3,000 for assembly and plastering).

We entered 30 TEUR and it seems they accepted that, although the details of the decision-making at the bank are not communicated to you and ultimately you don't really care - main thing is approval. The 30 TEUR break down into: Painter: 5,000 (+5,000 material) Floor: 5,000 (+5,000 material) Windows: 10,000 (+20,000 material) Exterior: 10,000 (+10,000 material) In the end, everything will be distributed a bit differently, but the saved labor costs are about right. Flooring might even be more (tile setters are expensive), windows maybe a bit less.

Good morning,

so with "Eigenleistung = muscle mortgage" you can improve a lot on the conditions, especially in new constructions.

I have already seen cases where ING recognized 60-70,000€ as own contribution (if you do a lot of the construction work yourself) when it is taken into account in the cost calculation by the architect, and it is plausible. Especially with laying floors, painting, and outdoor facilities, you can apply quite a bit...

so with "own contribution = sweat equity" you can improve the condition quite a bit, especially in new construction.

I have already seen cases where the ING recognized 60-70,000€ as own contribution (if you do a lot of the construction work yourself)

But here it is about a mid single-digit amount. Just wallpapering/painting/laying flooring.

So 5000€? That is nothing for a new build...

Many banks accept 15,000€ in equity without proof...

I always say: what would it cost if the painter paints the whole house? 10,000-15,000€ plus materials; this amount is accepted by many banks exactly like laying floors (150sqm tiles or parquet flooring); with the work we are quickly already in the double-digit amount.

Therefore, 5000€ is nothing...

For the new build, I would rather set it at double digits (so over 10,000€ equity or more), whatever is needed for the next interest rate tier ;)