House purchase and house construction - What can we afford

So - at least there is some news on the job front. The new employment contract is signed, so now I am just a shade below my partner - the regular salary doesn't change much, but now I get a few more salaries per year :-).

The whole project will probably be delayed a bit because I am in the probationary period until the middle of the year and that is probably not the ideal condition for a loan.

That fits quite well. Only the fixed household net income will temporarily decrease in the foreseeable future (that is the big point for me) – it certainly won’t be 2 years of parental leave – but whether both of us can then immediately return to full-time work with the child is still the open question (-> even though we ourselves have the best possible conditions with 100% remote work and for her a 100% secure job in the corporation).

But that’s very simple: calculate with half the net income, 4000€, and from that the rate for the mortgage can only be 1/3, so 1300 to a maximum of 1400€. You have to cover everything else from equity. For 1300€ monthly one could currently get 250,000 to 300,000€, which together with the equity makes a house price up to 800,000€. That may not exactly impress your neighbors or colleagues in your environment, but you won’t have financial stress with the house, can calmly arrange childcare, and still afford many other things.
Only, if there should ever be a "Lastenausgleich," then a largely debt-free home is probably not so good...

Not wanting to be contentious, but there is no 100% secure job outside of civil service. One should not fool oneself. Not even in a corporation. VW has just announced massive cuts in administration; they were considered lifelong employers in the region for decades. That is over.

With 2 (small) children, full-time work will definitely be difficult, but it also depends on the federal state. In Saxony-Anhalt there is traditionally good after-school care; the older one usually does not want to go home. The daycare also offers 8 hours at reasonable prices. That means both children are occupied from 8 am to 4 pm, but with pick-up and drop-off, a real 8-hour workday doesn’t fit in there either. And still, my wife does not work full-time because it simply does not make sense. There is also so much to do around the house, which one would never manage otherwise. Besides... If I give the children away for 10 hours daily, I don’t need to have any in the first place, in my opinion.

Among colleagues in Bavaria, the kids stand at the door at 1 pm after elementary school, and childcare is generally extremely expensive down there.

And the probation period is said to be a minor problem at banks, unlike a fixed-term contract. It is simply assumed that one will not mess up and the employer will hardly dismiss anyone given the current shortage of skilled workers. By the way, the employer can terminate with 3 months’ notice even after the probation period, which is often forgotten. Passing the probation period is not a guarantee of lifelong employment there.

VW has just announced that it wants to save massively in administration; they had been regarded as lifelong employers in the region for decades. That's over now.

But then you can surely also expect a decent severance package..

I worked for a very large corporation, the severance program was really incredible.. but a few colleagues and I also made use of it in 2017 :)

Something like that will certainly also be possible there and given the current situation in the job market, you can surely find an administrative job somewhere..

But never again in that salary range.

But then you can surely expect a decent severance package..

I worked for a very large corporation, the severance program was really incredible.. but a few colleagues and I made use of it in 2017 :)

Something like that will definitely be possible there as well, and given the current situation in the job market, you will surely find an administrative job somewhere..

That may be true, but it doesn't have to be. Severance packages usually have the problem that the younger ones hardly get anything and for the older ones it’s not enough to last until retirement. And job market situation aside, a 55-year-old is rather unlikely to be hired, especially if they have spent their entire career at VW. You first have to invest a considerable amount of time to retrain the ex-VW employee from a 7-hour workday with 2-3 hours of effective work to an 8-hour workday with 7-8 hours of effective work ;)

But that’s just by the way. One simply shouldn’t be 100% sure that they will never ever lose their job. That doesn’t exist, and it’s also not necessary for financing a property.

All the more important is that you don’t push all the controls to the limit and drive the installment so high that even the smallest negative income change would throw you off course. Also very dangerous is the mindset: "It might be tight today, but in 5 or 10 years we’ll earn significantly more, then it will work."