Financial planning for repurposing

Hello dear house-building community,

we have already presented our construction project in another thread and now wanted to hear your opinions on our financial planning. Here again are the key data:

Conversion of a hallway (former cattle barn) into living space. 200 m² of single-floor living area, adjacent to the parental house
Construction cost estimate: €240,000 (ALL-IN)
ALL-IN: Complete costs including furnishing and incidental expenses (architect etc.)

For the existing plot and "the building that is already standing," we pay nothing.
Personal contribution: approx. €50,000 (we have no time pressure since we live rent-free next door in the parental house and want to do what we can ourselves)

Planned construction period: up to 2 years
Equity capital: €25,000 (cash + home savings balance)
Financing requirement: €165,000

Note: The €240,000 is an estimate. Just like the €50,000 (estimated by the bank). The whole thing can of course cost €25,000 more or less; this is very difficult to assess with such a project.

And the plan is that we take out the KFW home ownership loan in the amount of €50,000 and in addition a TA loan of €100,000 (e.g. 30 years). Plus a variable bank loan of €50,000, but completely variable. So without a purchase obligation, etc. With the equity and personal contribution, we should be completely on the safe side. We had a (second) appointment at the bank last week and are still waiting for the exact terms. But we would like to hear your assessments already now.

Currently:
Income 1: €1,650 net (age: 29)
Income 2: €1,350 net (age: 28)

Security 1: €12,000 (old home savings contract with 4% interest, should preferably not be terminated)
Security 2: €10,000 (Riester savings contract, should preferably also not be terminated but would be available for an emergency emergency)
Not married, no children.

For the financing, however, we do not want to count on 2 full salaries, but only on one full salary (€1,650 currently) and a mini-job (€350 - €450).
What do you think about this planning? What would be the max monthly installment for interest + repayment (term: 30 years)? Please critically review. Many thanks in advance! If there are any further questions, feel free to ask :-)

With both salaries, I see financing of 165,000, which can easily approach 200,000 when, as almost always, there are some unforeseen expenses, as already tight. 200m² also cost at least about 400.- in additional costs, and you still have to live off something plus cars, etc... Apart from that, I would rather take out a loan than cancel the [Bausparvertrag].

Thank you for the feedback. So the income is of course worst case and as of now. Regarding the additional costs, we still have potential to save, as some things like e.g. garbage fees, insurance, etc. could possibly be "shared" with the parents. According to the household calculation by the bank, €1,370 is estimated for additional costs plus living expenses (including car, etc.). This almost exactly matches our calculation. We would then have room for a payment of about €600. Of course, we now have to wait to see what the bank says the installment will be for the €165,000. However, it should not differ much. Don’t get me wrong, I’m probably the last person who wants to sugarcoat things, but I actually think we can manage with this. Although maybe not living in luxury at first, but in our opinion, it should work.

Purely based on the framework data, you should get good conditions if the land charge can be registered on the already existing land.

The question is of course whether your parents will agree to that. After all, they then also bear the risk if you mess up.

Financing requirement: €165,000

And the plan is to take out the KfW home ownership loan of €50,000 and in addition a TA loan of €100,000 (e.g., 30 years). In addition, a variable bank loan of €50,000, but completely variable.

You want to borrow €200,000, even though only €165,000 is needed?

So, now to the nitty-gritty.
€50,000 KfW costs €203 per month and after 10 years there are still €35,000 outstanding.
You want €100,000 via TA over 30 years. So the TA runs for 15 years. That means €145.
Repaying the TA over 15 years requires about €225 of principal to get the usual 40% full.
That already makes €573...

Now there is still the €50,000 variable. That will tear your financing apart if you actually use it or even just "look at it."

In particular, a variable loan is often not "cheaper" in terms of interest, since the bank can refinance it worse. Also, the interest rate risk for you is quite high. Normally, such variable things are only used for bridging finance when the equity capital cannot be made liquid immediately.

Which bank is it?

I assume that we will get good conditions. It is our house bank (Volks- u. Raiffeisenbank) and they also know the complete ownership structure of the parents. Probably agricultural land will serve as collateral. So there is enough collateral, I can already say that.

We will receive more detailed figures from the bank in the next few days, then I can say more.

In any case, we want/have to borrow 150k. In addition, there is the personal contribution (for example, we only paid for materials for the complete electrical work and count that as equity) and about 25,000 € (probably more) in equity. We hope that we won't have to touch the variable 50k (for which there is no purchase obligation) too much. With that, we shouldn’t go far above 600 EUR monthly, which in our view is manageable even in the worst-case income scenario.

As soon as the offer is available, I will write with more exact figures.

Here, too, you should calmly ask an intermediary once in a while ;) asking costs nothing