House purchase: Rushed or feasible? Please assess!

Our situation (My boyfriend and I + 1.5-year-old daughter with the prospect of maybe another child in 2-3 years)

Monthly net income: currently ~3,900€ (with the prospect of tariff increases every three years of about 150€ monthly) plus child benefit. The jobs are (by today's standards) secure.

Due to the child and studies, we have not been able to save any significant equity in recent years, so the 10,000€ are negligible and would probably rather go towards minor repairs or renovations.

The property is a Canadian bungalow (post-and-beam construction) built in 2000 with 175m². Asking price according to the exposé is 259,000€. Plot size 725m². It is fully equipped with underfloor heating.

Additional costs for the purchase: notary, broker (7.14%!), property transfer tax. Roughly about 36,000€.

The broker considers an offer of 240,000€ realistic, so we would cheekily go down by another 5,000€. All in all, this results in a loan amount of about 270,000€ with a 115% financing.

The house itself is ready to move in immediately and requires no major renovations or even refurbishments. Exceptions: installation of a bathtub (pipes are already in place), replacing a door frame, where a thick glass door is already hanging (who installs a thick glass door in a wooden frame?) and possibly painting work, which could be done by ourselves. A fitted kitchen is also present and included in the price. In a few years, the exterior facade and the roof will need work (shingles, no tiles).

So far, we have been very spoiled with a warm rent of 653€, and I have also only been working full-time again since September (previously studies until 2010, then pregnancy and child and half a year part-time). Therefore, we cannot really estimate how much money will be left at the end of the month. Especially considering that we still occasionally have to eat out, drive a car, and our child needs a new (flea market) wardrobe every six months.

We have set a monthly limit of 1,000 - 1,100€, plus about 500€ additional costs (this is very high and will probably be less, but the bank has calculated with it). According to simple math, this means a burden of up to 1,600€ monthly. The term should not exceed 30 years.

Plot prices here in the Brandenburg region (direct catchment area of the future Berlin-Brandenburg airport) are currently somewhat volatile, but this should change once the flight routes are finally determined. That means plots without heavy noise pollution will become significantly more expensive, with noise pollution significantly cheaper. I am quite optimistic that the plot we are interested in will be spared from the worst noise (which our local house bank apparently does not see that way). So if we decide to save equity of about 36,000€ over the next two/three years, it is quite possible that the advantages will be eaten up by rising interest rates and land prices.

These are, broadly speaking, the numbers and prospects. Is there anything to work with here, or should we continue to enjoy our warm rent? I would appreciate honest opinions and advice on the realism/unrealism of our undertaking.

How are the €3900 divided between the two of you? Where is the child placed or what are the costs for this full-day care? Don’t you need money for new furniture? You should roughly be able to estimate how much money you have left at the end of the month... how else do you want to know how much you can pay off monthly at most? Is it also taken into account in the financing that your income could be lost again (second child)?

1.) The money is more or less split fifty-fifty. Percentage-wise, mine will increase slightly more in the future, but only gradually.

2.) The child is cared for by a daycare provider. Fees of approximately €220 are paid monthly to the municipality for this.

3.) Furniture is, in our opinion, initially of secondary importance (except perhaps the purchase of a new wardrobe) and can very well be acquired over the years. What we currently own in furniture is sufficient and would be taken to the house. Always, of course, assuming that the furniture actually survives another move.

4.) The second child is not yet considered in the financing. However, if we take out a loan, we would make sure that there is an option for reduced payments within a limited period. Especially since I do not plan to stay at home for more than a year, during which at least a reduced income from parental allowance would be available.

5.) Expenses: Of course, we have already conducted in-depth expense research based on our bank statements, but we have never had money worries and therefore paid little attention to what costs what. We are both not shopaholics and do not need expensive luxury goods. So I assume that with a more conscious handling of our budget and giving up, for example, regular vacations, cinema visits, or new computer games, we would manage. Now the only question remaining is whether financing is feasible with the given conditions?

Note: We have a phone appointment with an advisor from Interhyp today and an appointment with an advisor from ImmobilienScout financial consulting tomorrow morning. However, since I generally have had bad experiences with such financial advisors and advisors in general so far, I wanted to hear your Interhyp experiences here.

Loan amount of about €270,000

115% financing

monthly limit of €1,000 - €1,100

The term should not be longer than 30 years.

Unfortunately, these details do not fit together as they are...

If you take out €270,000 with 115% financing, you will likely get an interest rate of about ±4% for a fixed period of 20 years.

With 1% repayment, the €1,100 is just enough for the monthly rate... but then you would be finished more like in 40 years...

For 30 years, you would rather have to go towards 2% repayment, so about €1,300/month...

What you should not forget is that sooner or later more or less major renovations/refurbishments will be necessary... presumably before these 30 years are over!

Loan amount of about €270,000

115% financing

monthly limit of €1,000 - €1,100

The term should not be longer than 30 years.

Unfortunately, these details do not fit together as they are... If you take out €270,000 with 115% financing, you will probably get an interest rate of around ±4% for a fixed term of 20 years. At 1% repayment, the €1,100 is just enough for the monthly installment.. But then you will rather finish in the area of 40 years... For 30 years, you rather have to go towards 2% repayment, so about €1,300/month.. What you should not forget is that sooner or later more or less major renovations/refurbishments will be necessary... probably before these 30 years are up!

Unfortunately, these details do not match up...

If you take out 270,000 with a 115% financing, you will get an interest rate of about +/- 4% for a fixed period of 20 years.

With 1% repayment, the 1,100 are just enough for the monthly installment... But you would then be finished in about 40 years...

For 30 years, you should rather go towards 2% repayment, so about ~1,300/month...

What you should not forget is that sooner or later, more or less major repairs/renovations will be due... presumably before these 30 years are over!

Hello everyone.

Here’s a different opinion on the topic of fixing the rate for 20 years. Why stick stubbornly to a 20-year fixed rate and accept 4%??!! We were also faced with such an option. Then we went to the house bank and were offered 2.61% for 10 years. If I now put the 1.4% into repayment, you're at 2.4% repayment. But that is “only” fixed for 10 years. So where’s the problem? After 10 years, you’re at almost the same remaining debt as with the 20-year option after 20 years. And when the new negotiation happens is completely irrelevant, it depends on the remaining amount. Because no one knows what will be in 10 or 20 years anyway. Therefore, I am rather against this unrestricted pursuit of 20-year fixed rates. You always have to look at the difference compared to 10 or 15 years as well.