Financing single-family house in Saxony

We want to build a single-family house near Chemnitz. We still managed to get the application for KFW 55 through; I have not initially included the subsidy. What do you think? Is that possible or should we invest more equity? I know, the construction costs are alarming, but that’s how it is right now. I have calculated a 7.5% buffer everywhere, estimated the outdoor facilities at 50,000 EUR. We got the plot for 165 EUR/sqm at a current standard land value of 90 EUR/sqm.

General about you:

[*]Who are you? Steffi and Sven
[*]How old are you? f37/m42
[*]Are there children? One, 2 years old
[*]Are children planned? No
[*]What do you do professionally? f civil servant / m employed business economist
[*]Are you employed, self-employed, retired, housewife, househusband, etc...? civil servant / employed
[*]How many hours do you work? f20 / m39

Income and asset situation:

[*]What income do you have (gross/net)? f 2,400 EUR (* 12 monthly salaries), m 2,800 EUR (*14 monthly salaries), each net
[*]How much child benefit do you get? 192 EUR
[*]Other transfer payments like parental allowance, sickness benefit, etc...? None
[*]How much equity do you have? 420,000 EUR
[*]How much equity do you want to put into the house project? 342,000 EUR

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

Housing costs:

[*]current cold rent 890 EUR per month
[*]current warm rent 1,050 EUR per month
[*]electricity 74 EUR per month
[*]gas included in warm rent
[*]water, sewage, garbage fees, street cleaning included in warm rent
[*]telephone, internet, mobile phone: approx. 100 EUR

Mobility costs:

[*]monthly ticket for bus and train (also for the children!) not applicable.
[*]car loan (or saving rate for new car) 58 EUR p.m. leasing rate
[*]insurance 100 EUR
[*]taxes 30 EUR
[*]fuel 200 EUR
[*]repairs 100 EUR
[*]other ./.
[*]Is there a second car, motorcycle, scooter? Please list all items again! No.

Insurance costs:

[*]private health insurance (also supplementary health insurance, daily sickness allowance, etc.) already deducted from salary above
[*]liability insurance (also pets) 5 EUR per month
[*]capital or risk life insurance 200 EUR per month
[*]pension insurance (also Riester, Rürup, etc...) no
[*]disability insurance 40 EUR per month
[*]accident insurance no
[*]household contents insurance no
[*]legal protection insurance 20 EUR per month
[*]other insurances (such as travel insurance, funeral insurance) no

Living expenses:

[*]groceries 300 EUR per month
[*]restaurant costs 50 EUR
[*]care/drugstore 100 EUR per month
[*]pets (food, vet, medication, stable costs) no
[*]medications no
[*]clothing 200 EUR per month
[*]furniture no
[*]daycare/school fees (and meal money) 150 EUR per month
[*]tutoring no
[*]school supplies and books no
[*]club fees/gym no
[*]babysitter no
[*]toys 40 EUR per month
[*]cleaning no
[*]TV/video/audio/CDs/DVD no
[*]tickets (football, cinema, concerts, etc...) no
[*]donations no
[*]other no

Savings contributions:

[*]vacation 100 EUR per month
[*]house no longer in the future
[*]retirement provisions with capital insurances included above
[*]hobbies/gifts no
[*]other no

Other expenses:

[*]maintenance payments? no
[*]loans? no
[*]other? no
[*]anything forgotten? no

Income and expense totals:

[*]total income 5,392 EUR
[*]total expenses 2,677 EUR
[*]balance 2,715 EUR
[*]thereof sum of cold rent and dispensable savings contributions (e.g. savings rate for house) 810 EUR

General about the property:

[*]How large is the plot? 735 sqm
[*]What are its dimensions? 21 * 35 sqm
[*]What is the standard land value? 90 EUR
[*]New building, old building (year built), house type? New building
[*]Garages? Double garage
[*]How large is the house? (living area / usable area) 187 sqm / 250 sqm
[*]What market value do the plot and house have after completion? 620,000 EUR

Construction or purchase costs:

[*]land costs 121,000 EUR
[*]development costs 10,000 EUR
[*]ancillary acquisition costs (notary, court, real estate transfer tax, broker) 8,000 EUR
[*]construction or purchase costs (incl. architect, structural engineer) 733,000 EUR
[*]renovation and/or refurbishment costs
[*]additional construction costs (e.g. house connections, soil surveyor, construction electricity, etc.) 20,000 EUR
[*]outdoor facilities/terrace, paths, garden design, fences, etc. 50,000 EUR
[*]financing costs (e.g. fees or commitment interest)
[*]total costs 942,000 EUR

other costs:

[*]kitchen costs
[*]furniture, lamps, decoration
[*]other "not acquisition, acquisition ancillary, construction or additional construction costs" we finance entirely from equity

Cost breakdown:

[*]total costs 942,000 EUR
[*]deductible equity 342,000 EUR
[*]financing amount 600,000 EUR

Necessary loan information:
(for multiple components state for all components, please clearly separate different variants):

[*]loan amount 600,000 EUR
[*]loan type (e.g. annuity loan, bullet loan, etc...) annuity
[*]interest rate (p.a. nominal, otherwise effective) 1.85% p.a.
[*]fixed interest period 20 years
[*]remaining debt at the end of the fixed interest period ?
[*]assumed total term until full repayment 38 years
[*]initial repayment rate
[*]monthly installment 2,000 EUR
[*]special repayments possible? (indicate amount) 5,000 EUR p.a.
[*]repayment rate change possible? (indicate conditions such as number, repayment rate range) 2
[*]If pre-, interim- or TA-loans with building savings contracts please provide details on the building savings contract (building savings sum, credit interest rate, minimum saving rate, minimum savings sum, planned saving rate, Riester premiums, expected allocation date, later credit installment, credit interest rate, etc...)

I find it tricky.
Good equity, but still 40 years. I already flinch at 38 years of hypothetical repayment!
Salaries are not very generous for the remaining loan amount. And considering the low land value, I assume a medium-good location... I wouldn't build a million-euro project under these conditions.

Why build so expensive?
187 m2 at €4,000 should already be top shelf in Saxony??

Edit:
I just see a woman with a 50% position earning €2,400 net... From when is it full-time? Private health insurance already deducted?

As mentioned, a 7.5% buffer has been included, the discount has not yet been deducted, and overall the calculations are good (e.g. 50 TEUR for outdoor facilities). The excavation alone costs around 42 TEUR gross, due to the hillside location and somewhat rocky conditions. Regardless: Construction prices are currently just high.

Do you think the situation would look different if I start with a financing requirement of 550 TEUR?

The financing duration is fictitiously 34 years, I made a slip. Still a lot, I know.

I find it tricky. Good equity, but still 40 years. At 38 years of fictitious repayment, I'm already flinching! Salaries are not very generous for the remaining loan amount. And considering the low land value, I assume a medium-good location... I wouldn't build a million-euro project under these conditions. Why build so expensively? 187 m2 at €4,000 each should already be top shelf in Saxony?? Edit: Just saw woman with 50% position at €2,400 net... From when full-time? Private health insurance already deducted?

Woman will increase to 75% in two years. Private health insurance has already been deducted, as I wrote.

The excavation alone costs approx. 42,000 EUR gross, due to the hillside location and somewhat rocky terrain.

42k € seems very much to me, for example. About how many cubic meters are we talking here approximately? You will certainly be able to store a large part of it on the side given the size of the plot and later use it for backfilling the excavation pit and for terrain modeling, won't you?

I have two offers, both are roughly the same. It’s not about the costs themselves, as you can discuss that endlessly, but more about the financing.