Financial realization of a single-family house realistic?

Hello everyone,

I was at my house bank (Sparkasse). We have received a basic financing commitment with the following conditions:

1. Annuity loan, 276,000 euros, effective interest rate 1.33%, monthly payment 1,018 euros (repayment approx. 3.13%), fixed interest period 15 years

2. KFW 124 loan, 100,000 euros, effective interest rate 1.01%, monthly payment 388.60 euros (repayment approx. 3.68%), fixed interest period 10 years

3. KFW 153 loan, 120,000 euros, effective interest rate 0.97%, monthly payment 393.66 euros (repayment approx. 2.99%), fixed interest period 10 years

Monthly payment: 1,800 euros

Besides, it should be mentioned that we currently still have a loan with Sparkasse for a condominium (110% financing, approx. 0.6% effective interest rate, 192 TEUR, remaining debt approx. 190 TEUR, market value of the apartment approx. 190 TEUR, term 1 year).

I am very happy to receive an assessment/feedback.

Thanks in advance!

Best regards, Rallye

So about €490,000 of financing, with a net monthly income of about €5,400
and you have saved over €2,000 monthly in recent years despite rent expenses?

I wouldn’t try to forgo a few wishes/extras here. Because as an "owner" you’ll want to buy those again later. So finance cheaply now, get everything done + then put whatever is left into special repayments!

Finance for 20 years (fixed interest) with a monthly €2,000 installment (annuity of just under 5%, so interest and repayment is already healthy) this way you will have a small residual debt left after 20 years, and that could be paid off during the 20 years with special repayments.

So little risk! And with the right bank you could also buy flexibility in case a job should fail for a "while".

Well, I would find the calculation very risky. Why?

€2,000 installment + about €500 ancillary costs = €2,500
Minus warm rent €800 + €2,000 savings per month over the last 6 years
= €300 that you can still save monthly. For me, that would be too risky.

Husband's income: approx. 4,100 euros per month with tax class 4, full-time, no further significant increases in salary expected aside from inflation adjustments

Wife's income: approx. 1,300 euros per month with tax class 4, part-time, likewise no increase in hours or major raises expected.

Well, I am not a tax advisor, but I think you should quickly change the tax class to 3/5 to significantly increase your net income.

Or do you like getting refunds once a year?

Best regards

Tolentino

HI,

I am not a tax advisor either, but I am very conservative. I would rather receive a refund than have to pay money back to the tax office. In addition, I have about 5 - 10 thousand euros in income from freelance work per year, on which I do not make any advance payments. This works quite well with our tax classes.

Anyone with an assessment of the financing offer from Sparkasse, maybe with optimization suggestions?

Thanks and regards

So I would find the calculation very risky. Why?

2,000 € installment + approx. 500 € additional costs = 2,500 €
Minus warm rent 800 € + 2,000 € savings each month over the last 6 years
= 300 € that can still be saved monthly. For me, it would be too risky.

Now there are more details – the installment would be 1,800 € over the next 10 years, leaving a buffer of 500 € according to your calculation. And the repayment of the additional apartment is not consumption, but rather illiquid invested capital. What I would find problematic for myself is the short fixed interest period. Everything over 20 years would be ideal, but KfW is of course practical.

Of course, the apartment is good, with which one could theoretically (with good value development and a possibly tax-free sale) replace the KfW components in the event of too large an interest rate increase, which might minimize the risk a bit. Still, the total loan amount is not insignificant: the pure loan installment is at the known 33% of the household net income, the total amount at almost 92 monthly household net incomes. It’s possible, but the limits are reached.

HI,

my calculation is extremely conservative both regarding costs and revenues; I have estimated the total costs very high in my opinion, and assume that these will be somewhat lower. I have also not included my income from self-employment.

In addition, over the past 3 years I have saved about 90 TEUR because during that time I was promoted to department head. I even assume I will be able to save over 30 TEUR in the current year. Ideally, I will also get a salary increase of about 3.5 to 8% this year.

I am aware that it is still at the upper end.

I was specifically concerned about the financing. I would have said the first offer is okay. The two KFW loans will probably be hard to beat?

I now wanted to check the other major banks.

Best regards