Financing realistically with current interest rate developments

2022-09-05 08:10:39

Well... what interest advantage do you have if you contribute 225k instead of 175k?

Maybe it only has a small interest advantage. But instead of 400k, only 350k is borrowed. You will feel the difference every month.

Especially if the net income for such a project is not exactly abundant, you should rather keep a little more as a reserve. Otherwise, an unforeseen turn can quickly lead to problems.

Correct, therefore my suggestion is to start now with, say, 1.75% instead of 2% repayment, and then immediately make a special repayment of all remaining equity after completion of the construction. That would be like having taken out a smaller loan with 2% repayment. The exact numbers have to be calculated again; I only estimated them now.

2022-09-05 10:36:55

Thanks for your input. We still have a bit of leeway, the option with the lower repayment and the delta at the end of the year is currently also my favorite. Due to contractual special payments, there is enough buffer, although I would prefer to set aside the money "myself" each month. If we could get somewhere below 4%, that would actually be great.

However, in the end, our pain threshold is almost reached by now. So, better to start with just the land and then see further. After all, one still wants to have some quality of life.

2022-09-06 10:22:50

Based on experience, not much of the 75k equity will remain ;) And even if it does... I would always keep 20, 25k EUR in reserve. What if the car breaks down? Then finance the used one at 5% to repay the 3.2% loan?

And I stand by this:
One should consider putting free capital into the financial markets. Since 1976, the MSCI World has generated an average(!) return of 8% per year.

2022-09-07 08:40:31

Experience shows that not much will be left of the 75k equity ;)
And even if there is... I would always have 20, 25k EUR in reserve. What if the car breaks down? Then finance the used one at 5% to pay off the 3.2% loan?

My last three cars together did not cost 20k€. I find it excessive to keep such an amount as an "emergency fund." It is not really an emergency if you "have to" buy a car for 20k€.

On the topic:
Looks solid. You are only 30 and 29. Others at this age still live with their moms and are just finishing their studies on the third try.
You yourselves will know best roughly how your salary development will look. I would not plan this as fixed, but at least keep it in mind.
The house is rather cheap at 400k€. From my own experience, I would advise you not to make big compromises on the fittings. So don’t choose vinyl flooring instead of parquet just because you currently feel uneasy about the high amounts. After building the house, all that will be forgotten again, the mountain of debt turns into a (in my opinion) normal mortgage - only the ugly vinyl floor remains :p

2022-09-07 13:24:17

After the house construction, all of that is forgotten again, the mountain of debt turns into a (in my opinion) normal mortgage payment - only the ugly vinyl floor remains :p

This has proven to be very true for us.
It even becomes such a reality that it’s best to set up such extra repayment plans as a standing order to a separate savings account. Otherwise, two years after the construction you’ve returned so much to normal everyday life that your fixed costs just get deducted from your salary account every month, and you don’t really keep the rest present in your mind. You don’t think about your remaining debt every two weeks. Accordingly, also secure plans for the annual extra repayment via a regular standing order.

Otherwise, I join the pro side. You are young. For your age, you have extremely good equity.
You have calculated the ancillary construction costs refreshingly generously. And you keep a pretty decent buffer in reserve.
The salary also still offers potential.

2022-09-07 19:17:33

My last three cars together didn’t cost 20k€. I find it exaggerated to keep such an amount ready as an "emergency fund." It's not really an emergency if you "have to" buy a car for 20k€.

On the topic:
Looks solid. You’re only 30 and 29. Others at this age still live with their moms and are finishing their studies on the third attempt.
You’ll know best yourself roughly how your salary development will look. I wouldn’t plan on it as fixed, but at least keep it in mind.
The house at 400k€ is rather cheap. From my own experience, I’d advise you not to make big compromises on the fittings. So don’t choose vinyl flooring instead of parquet just because you currently have a bad feeling about the high amounts. After building the house, all that will be forgotten, the mountain of debt turns into a (in my opinion) normal mortgage rate – only the ugly vinyl floor stays :p

Ugly vinyl floor? We decided on vinyl instead of parquet because the only option for ugly master parquet had very thin planks... the vinyl looks much better, is similarly priced, and more durable for kids...
In the living-dining area, we are choosing nice wooden floorboards for an extra charge :)

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Financing realistically with current interest rate developments

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