Evaluation of financing offer for new construction

Good morning,

I would like to get feedback/opinions from you on the following financing offer:

The financing is solely in my name.
Salary approx. 3100 net (no bonuses or special payments expected.)
2 children: I receive child benefits. ([Baukindergeld] is to flow into the special repayment if possible.)
Construction costs including land and incidental costs €382,209 gross
Equity at the moment €46,000
The land is mine and therefore already paid for. (€49,709)
Own contribution €21,500 (I am a trained electrician, so I will do the electrical work, photovoltaic system with storage myself. I will also do the surface collector and painting/wallpapering work with support from buddies who work in the field and can give me tips accordingly.)

Thus, there is a financing requirement of €265,000.

The offer is as follows:

€165,000 annuity loan, with 1.23% effective annual interest rate, 2.75% repayment, 20 years fixed interest period, €544.50 installment, remaining debt after 20 years fixed interest period €62,385

€100,000 KFW 153, with 0.48% effective annual interest rate, 3.23% repayment, 10 years fixed interest period, €306.75 installment, remaining debt after 10 years fixed interest period €70,349 (5,000€ repayment subsidy not yet deducted)

Would that be okay so far, or do you see a catch, or anything I have not considered?

I would be very happy to receive feedback.

Thank you very much.

I would leave out KFW and do 265,000 over 20 years. That should currently be available for 1.1% p.a. I hope you don’t have a basement, because otherwise the budget won’t work.

Do you still have a financial buffer or money for the kitchen? Based on the invoice, probably not. Therefore, I would rather plan with €300,000.

Thank you very much for your opinion. No, there is no basement. The kitchen is included in the calculation, but I have to admit it is rather Spartan from Ikea. I have only planned a very small buffer of €12,500. I have not calculated it directly now, but what advantage would I have in financing the entire amount at 1.1%?

What bothered me about the KFW variant in my financing was the 10-year fixed interest period. With a remaining debt of 70K€ after 10 years, there is still the risk that your monthly annuity could be higher in the follow-up financing if interest rates rise. And if you keep the entire financing at 1.1%, I roughly believe that you won’t end up paying more that way (unfortunately, I don’t have the means to calculate right now). However, you do have the advantage of interest rate security over the 20 years.

This is a very tight situation, even in Niedersachsen. Please explain the financing needs once again. 382,209 - 49,709 = 332,500€. I consider it completely unrealistic to save 675,000€ through personal contribution with the mentioned trades, even if you are partly a professional and certainly have good contacts. If you didn't already have a plot of land, I would recommend an old building plus renovation. I believe it is too tight with the income to build.