Financing for new construction: realistic or rather wishful thinking?

Hello everyone,

I have been quietly reading along for a few weeks and now wanted to ask for your opinion.
We are currently planning a new build and have certain ideas that we are still flexible with and are currently finding our way with.

It is about purchasing a plot with a city villa (wish would be approximately 140/145 sqm). We have already obtained a few offers. It should be built turnkey (we will do the painting and flooring ourselves, as well as the outdoor facilities and the carport).

Let’s get to the facts:
General about you:

[*]Who are you?
[*]A married couple with one child
[*]How old are you?
[*]32 and 29
[*]Are there children?
[*]Yes, 1 child (0 years)
[*]Are more children planned?
[*]Yes, another one
[*]What do you do professionally?
[*]IT and process management
[*]Are you employed, self-employed, retired, housewife, househusband, etc.?
[*]Employed and on parental leave until May 2025, then part-time
[*]How many hours do you work?
[*]40 and (after parental leave) 26

Income and asset situation:

[*]What income do you have (gross/net)?
[*]Currently €4,500 due to parental leave, from June 2025 €5,000 due to part-time employment
[*]How much child benefit do you receive?
[*]€250
[*]How much equity do you have?
[*]€50,000
[*]How much of this equity do you want to put into the house project?
[*]€50,000

Expenditure situation:
Expenses that are already included in other positions can of course be left out. This list is not exhaustive and can be expanded or summarized as desired. Please make sure to state all costs monthly, even if they only occur annually!

Housing costs:

[*]Current cold rent
[*]€700
[*]Current warm rent
[*]€950
[*]Electricity
[*]€60
[*]Phone, internet, mobile, broadcasting fee
[*]€90

Mobility costs:

[*]Insurance
[*]€115
[*]Taxes
[*]€20
[*]Fuel
[*]€200
[*]Repairs
[*]€70

Insurance costs:

[*]Private health insurance (including supplementary health insurance, daily sickness benefits, etc.)
[*]€35
[*]Liability insurance (including pets)
[*]€10
[*]Capital or term life insurance
[*]€40
[*]Pension insurance (including Riester, Rürup, etc.)
[*]€30
[*]Disability insurance
[*]€40
[*]Household contents insurance
[*]€10

Living expenses:

[*]Groceries
[*]€700
[*]Restaurant expenses
[*]€50
[*]Care/drugstore
[*]€150
[*]Pets (food, vet, medication, stable costs)
[*]€50
[*]Medication
[*]€60
[*]Clothing
[*]€160
[*]TV/video/audio/CDs/DVDs
[*]€50

Savings contributions:

[*]Other purchases
[*]€100
[*]House
[*]€800

Income and expenditure totals:

[*]Total income
[*]€4,750
[*]Total expenditure
[*]€3,780
[*]Balance
[*]€970
[*]Of which sum cold rent and dispensable savings (e.g. savings rate for house)
[*]€2,570

General about the property:

[*]How big is the plot?
[*]450 sqm
[*]New build, old building (year built), house type?
[*]New build city villa
[*]Garages?
[*]No, carport planned as own work
[*]How big is the house? (Living area / usable area)
[*]Wish would be 145 sqm

Cost breakdown:

[*]Total costs €595,000
[*]Plot (including property transfer tax, notary costs): €125,000
[*]House (including kitchen and materials for walls/floors): €405,000
[*]Additional costs €50,000
[*]Outdoor facilities: €10,000
[*]Buffer: €5,000
[*]Deductible equity €50,000
[*]Financing amount €545,000 (installment would be around €1,950 - 2,000 including KfW loan)

These are now the rough framework conditions; if any information is missing or not detailed enough, please feel free to ask.
The second child does not initially play a major role in the financing, as not much would change there because I already have a part-time position and, before the second child, would increase to 30 hours in order for the parental allowance to stay within limits. The rest would be topped up monthly by my parents.

Then from around June 2025 my part-time salary would come in, and we would thus have income of €5,250 instead of €4,750. However, kindergarten would then be added with €350. Until then, we would only have the interest payment and no repayment yet (during this one year, we would also have support from my parents).

Now I hope for your honest opinion whether this could be realistic or if we should still adjust the square meters. We are certainly also willing, for example, not to continue spending €300 monthly on clothing and drugstore items.

Many thanks in advance for your feedback!

Hello, including additional costs, 50% of the income goes towards the house. Any buffers do not exist. Leave it!

Yes, that will unfortunately not work, especially with 2 children. Your income is simply not enough for 2,000 EUR just for the installment. That would be a good 2,600-2,700 EUR just for the house, without building reserves.

Yes, that will unfortunately not work, especially with 2 children. Your income is simply not enough for 2,000 EUR just for the installment. That would be a good 2,600-2,700 EUR just for the house, without building reserves.

Good morning, thank you very much for the feedback. Which installment could be considered more realistic?

Multiply 5,000 net by 0.35, that is the pain threshold a bank sets, which makes 1,750 EUR. And even that still comes from times before inflation... I would have said 1,500, I wouldn’t do more than that.

As a rule of thumb, 1/3 of the net income is mentioned as the installment. That works with lower incomes. Not always. I also went over the third.

I would advise you to look for one size smaller. A terraced house, a small plot already saves a lot.