Financing a single-family house approx. 450k - How to implement?

Hello everyone,

This is my first post in the forum and right away a fundamental question. It is about the basic financing of our construction project.

We are planning to finance a single-family house in the beautiful Allgäu. The plot of land will cost about €100,000, and for the house we are calculating about €300,000. Including incidental costs, the total should be around €450,000 - €500,000.

About us:
We are 33 (m = me) and 31 (f) and have a 2-year-old daughter. Another child is planned sooner or later.

Equity: currently €65,000

The income situation is a bit complicated, which is also the reason for my post here.

My wife currently works on a €450 basis because of our daughter. Of course, she will work more again at some point, but due to the wish for another child, we do not necessarily want to count on her income for the financing. Sooner or later, this will amount to about €1000-1200 net in part-time.

I have a highly variable income:
Net fixed is €3100 for me.

Additionally, there are at least €15,000 bonus, normally €25,000 if the year goes well (perspectively in the next years due to growth anyway) €30,000 - €35,000 bonus (each net).

Our idea would be to find financing where we pay about €1000 per month (rent currently €900) and cover the rest through (high) special repayments.

Rough calculation:
30 years x 12 months x €1000 = €360,000
30 years x €10,000 special repayment = €300,000
= €660,000

The special repayment can of course occasionally be lower, but generally a bit more should also be possible. Our general goal would also not be to repay over 30 years but rather to be done in 20 years. We just want to keep the “pressure” as low as possible.

How can we implement this kind of financing?
Do banks cooperate with this?
Is this even realistic?

We would be very happy to receive suggestions and contributions.
Best regards

Our idea would be to find a financing where we pay off about €1000 monthly (rent currently €900) and handle the rest through (high) special repayments.

With a loan of €435K, €1000 is less than 1% amortization. That could be problematic with some banks.

1% is approximately €1200.

But don’t forget that on top of the installment, there are ancillary costs (HNK) of €300-350 monthly.

The special repayments of 12K + 10K are almost already covered as standard (with €435K, 5% special repayment is €21,750 per year). However, there is usually the condition to do it all in one special payment per year.

With the interest rate lock in your situation, I believe you have to say goodbye to the 30-year term (the rate there is definitely around 3.2/3.3%); also, the number of banks offering 30 years is very limited.

With a 20-year fixed interest period, it’s significantly cheaper (2.3/2.5/2.7%); that would be my guess.

Go to banks and also brokers. What you want is not really unusual.

Why a 20-year fixed interest period when after 10 years it is planned to have repaid beyond 50%? More than 10 years is, in my opinion, wasted money. With a maximum of 10 years fixed interest period and 1.5% repayment, you get close to 1000€. However, the special repayment must then be made. It is also a kind of pressure.

Phew, then I'll start... and I have to pull a lot of teeth for you right away.

The only thing the bank cares about is your fixed monthly salary; all variable payments except Christmas bonus / night holiday pay do not exist for the bank. No chance.

The statement “sooner or later the wife will work for x€” and “second child” do not fit together. If she goes back to work, you will have paid off 1/4 of the house.

So, for the bank, you have a monthly household income to be credited of 3100€ + 450€ + 194€ = rounded up to 3700€.

Calculate all-in with at least 500k€, rather even more. The info is not enough for that. Minus equity, the loan requirement could be 435k€.

The realistic mortgage calculators give an interest rate of 2.3% with 20 years fixed interest rate and 1% repayment. The installment is 1200€, it can’t go lower. Duration of 53 years. If you then choose not a 5% special repayment but 10%, you are at an interest rate of 2.4%. Since you receive a lot of variable salary, you might want to swallow that pill. So that you also understand… of the 1200€, only 360€ is repayment, the rest is interest.
So you notice yourself that your calculation of 660k€ over 30 years is for the trash, right?

You then end up with an annual special repayment of at least 10k€ at 23 years.

Living with additional costs will then cost you about 1650€ per month without reserves.

There aren’t many banks left that accept a 1% repayment. For this low repayment, as noted above, there is an interest surcharge.

Whether it works or is realistic, I don’t want to judge.

Why a 20-year fixed interest period when the plan is to have repaid beyond 50% after 10 years? More than 10 years is, in my opinion, wasted money. With a maximum 10-year fixed interest period and 1.5% repayment, you get close to €1000. But the special repayment must then be made. It's also a kind of pressure.

You're not serious about suggesting something like that with this amount, are you?

Thank you very much for the initial responses. I would like to address one or two points:

The mentioned 30 years do not refer to our planned or desired fixed interest period but only to the intended maximum billing period (approx. time until retirement). The estimated 660k was only meant as a possible payable amount with a 10k special payment (including interest, of course), not as a repayable amount.

We are aware of the ancillary costs of the house; the €1000 repayment was chosen based on experience (household book, etc.) so that it is still easily manageable – we live quite frugally and, until now, have been able to live every year without my bonus while simultaneously saving a little.

How banks handle the bonus issue is my biggest unknown; I am looking forward to more input here. Zaba12 writes that banks do not care about it, which I find somewhat strange. Over the past years, I can prove salaries exceeding €110k gross each year through payslips/tax certificates, etc. A corresponding target salary is also recorded in the employment contract and in the annual bonus agreement. I would have to deliberately refuse work (and so would all my colleagues) not to achieve at least a €25,000 gross bonus.