Financing new construction. An offer is available for the house

Hello everyone,

following question:

Me: 39 years old, managerial position for 16 years in the IT company, 3300-4000 net (70k gross last year)
Her: 38 years old, 10+ years in the public sector, currently part-time 28h 1600 net
Child benefit: 2x 184 € = 2 children, 3 and 7 years old

Fixed: 5000 net ~ average was 5500,- in 2016 however
Current equity: 10,000

Why so little equity? Lived well, good cars, mistakes in youth (rented house and blew money there...)
Anyway ... previously paid off a loan over 40,000€ in Dec 2016
Currently saving 2000€ per month with a warm rent of 1200 € and a car loan of 416 €.

Currently we assume interest rates will rise again.

Estimated total costs ~440,000 €
125,000 land
240,000 144sqm KFW 55 house
40,000 incidental costs
17,000 outdoor facilities
15,000 painter / floors

Offer for the house is available: buffer 15,000 in the house, until we move in we could on average only save 1000€ per month. This brings us another 12k-14k more equity until March 2017

What kind of rate comes out of that, is 1500€ realistic if you go until retirement?

Land unfortunately can’t be cheaper in the region.
Is this suicide or can you dare it? If the interest rates rise it won’t work either, inflation is already present, therefore I assume that after the FED the ECB will start soon as well.

Thanks in advance.

Is the property price inclusive or exclusive of [Kaufnebenkosten]?

125,000 fully developed. The 8.5% notary plus land transfer tax we will want to pay from equity.

Which gives us another 12k-14k more equity by March 2017

So 100%. The current 10K is already gone for incidental purchase costs, and the expected additional equity also quickly disappears for many nice things (e.g. lamps etc).

Now roughly calculated:

Finishing in 27 years means, with a mixed interest rate of e.g. 2.4% (fixed for 20 years) and unchanged follow-up conditions(!), already about €1850 per month.

So mentally I would already say goodbye to the €1500 if you talk to banks or brokers.

Or do you really want to pay off the place during retirement?

Thank you already for your honest answer.

I want to be finished before retirement, like probably everyone, but I would enter retirement to reduce the installment. I would rather plan for special repayments. A special repayment is quite conceivable every year; in December there are/were about ~9k net combined, so there is also something left over for special repayments, regardless of whether we save extra.

As is often the case, I naturally have some worries about it (a big number, what if...).

I would rather wait a year now, and we would reach 40k, but it doesn't add up if interest rates go up by 1% in the meantime... that if remains even at 40k and even at 80k, because the real estate market seems a bit "inflated" to me.

We have now looked at several existing properties, but these are not comparable to a new build.

Somehow you can't get below these 440k unless you find a cheaper plot of land. However, that seems rather unrealistic at the moment.

The following questions arise:

- Do you want to provide personal contributions?
- In which region - due to state funding - should construction take place?
- Is the equity capital in a building savings contract?
- Is an employer loan possible?
- How realistically do you assess the making of special repayments? At what amount do you consider the special repayment to be secured and realistic?