Financing - Loan agreement signed

yes that's true. Nice little spot. But if you work farther away, it's quite remote.

We signed our loan agreement yesterday. I think we really got lucky with the conditions. 1.73% (mixed interest rate) fixed for 25 years. I’m really happy. We now have a monthly burden of €2,200. Don’t be shocked, we borrowed €720,000. With this amount, you really feel sick. But it should all be paid off after 25 years. Well, now the house just has to turn out nice. No, by the way, we’re not building a villa, just a semi-detached house!

Unfortunately yes :-( We’re paying €1,100/sqm... around Munich, of course. But in the neighborhood, a plot is being sold for €1,300, so I think we really got insanely lucky. Still perverse prices!

I don’t know whether to congratulate you or to pity you right now.
With these prices per sqm, I feel really sick.

But since you’re happy, I’ll congratulate you.

Phew, then mine must have been stronger after all .

No, seriously: Cool, for me that won’t be possible again for another 2-3 years, once the construction has settled financially. Let’s see if there’s a 5 in front then... I would definitely be up for it .

When you’ve built a house, things like that are usually compensated with a lawn mower, etc.

Low interest = high residual debt if the repayment is not increased accordingly.

Yes, the amount of debt is a lot. And I would prefer less. But I don't think we are overextending ourselves completely. The financing is not built on a knife's edge. You have no idea about our financial situation. Do you think a bank nowadays would just give someone €720k if there are not sufficient securities? I don't think so...

planned so conservatively that we will have 40k left after the house completion and can put it directly into repayment.

That's really great! We also planned conservatively and included a lot of buffer, but knowing myself, I don't want to give up anything and always want more.... then there won't be any buffer left either

That's really great! We also planned conservatively and included a bunch of buffer, but knowing myself, I don't want to give up anything and always want more.... then there won't be any buffer left either

With that attitude, you might soon have to fall back on your securities...

And no, I don't know your financial situation, which (no offense) I don't care about, because it's your business. You have to feel comfortable with it. I just said that it wouldn't be for me.

As for the bank: I have heard of cases where customers were offered 1% repayment and loans they couldn’t actually afford. That’s why possible securities are no guarantee for sustainable financing. In the beginning, everything usually seems great... the harsh awakening comes only after the regular term when you realize that you can no longer afford the house because either interest rates are higher now or the calculated repayment didn’t work out.

We also faced the choice of a 30-year fixed interest period or 20 years at significantly better conditions. It now costs us €300 more in repayment per month, but hey, I want to be done someday. I don't live just for the house and enslave myself for it. I always say: the house must serve me, not me the house!

And as you write that you don’t want to give up anything: do you seriously think you'll carry thousands of euros every year for 25 years to the bank for special repayments, or wouldn’t you rather spend the money on things you want to afford? I bet on the latter... and suddenly... the concept goes out the window.

I find banks that allow this irresponsible, sorry. Because if the financial background were so excellent, you wouldn’t have to take on so much external capital. And only in that case would I not worry.