House purchase - total costs, equity vs. bank loan -> how to calculate?

Hello dear forum members,

We have a property in sight.
Purchase price is 550k EUR, totaling 650k EUR including ancillary purchase costs (6% taxes, 3% notary/land registry, 6% broker).
Additionally, there are certain moving costs and building refurbishment. I would estimate about 30k EUR.
Basically, we currently have about 400k EUR in equity free cash (albeit in securities, but liquid on trading days).

Income:
Net income of 2 adults (4k + 2.5k) and a 3-year-old child => 6.5k per month

How would you calculate this and what amount should I request as a loan from the bank?
Currently, I would prefer to borrow more (if yes, what does the bank allow here?!), and then rather participate a little more in the stock market.
Also considering that one often invests more money in the house than expected.

Thanks and regards,
Smeagol

Mostly a matter of personal taste. How much security does one need/want, etc.? As I have often written, no one can predict the stock market. Basically, it can be said that a loan-to-value ratio below 50% does not bring a better interest rate. Even 60% is often enough for a very good interest rate. Your income is also quite high, so it basically allows room for speculation on the stock market. Depending on taste, one could consider keeping 80-160k in reserve and speak with the financing advisor about where the interest rate limits lie. Do taxes still have to be paid on the 400k?

Thanks for the info!

Yes, you are absolutely right about the stock market. It’s also not meant to be a free pass for gambling (which I have never done so far, but have practiced Buy & Hold over the years).

Valid question about taxes: The 400k would be what remains after taxes (basically net).

I also thought like this: Assuming something comes up in the whole construction (fingers crossed), meaning income stops, one could still cushion the monthly annuity payments for the first few months from the cash. But as I said: I lack the "fine sense" for what the right way would be here...

The 400k would be what remains after taxes (basically net).

That is really quite a substantial amount.

Just as I said: I lack the "fine sense" for what the right way would be here...

What is good depends on many parameters: your age, loan term, fixed interest period, risk tolerance, other property to cushion problems, monthly expenses that could jeopardize the installment, ...
And also on many things that cannot be predicted: stock market development, interest rate development, ...

That is really a very decent amount.

Yes, lived rather ascetically and built up reserves.

What is good depends on many parameters: your age, financing period, fixed interest rate period, willingness to take risks, other property to cushion problems, monthly expenses that could jeopardize the rate, ...
And also on many things that cannot be predicted: stock market developments, interest rate developments, ...

Yes, that's surely crystal ball stuff.
The premise used to be: pay off all debts as quickly as possible.
In the low interest phase, I currently think a bit differently:
Let’s run it as an annuity loan for 10 years and continue to stay invested in parallel.
If the interest rate rises during the 10 years, we simply save a little more until then (in anticipation of higher debt service due to the interest rate increase) and secure ourselves with a forward loan if necessary.

We also don’t want to set the rate too high, because even in the "best years," being in our 40s with a child, vacations should still be possible and we don’t want to tie our hands too tightly.

RotorMotor has already mentioned a few good things.

I would proceed as follows: Set a max rate (or a rate comfortable for you) e.g.: 1250 to 1500
By when do you want to have the loan repaid? e.g.: 20 years
You will end up at an annuity of 4.5 to 5%.
Then you quickly arrive at a possible loan amount.

The other alternative:
From the asset perspective: What should your target portfolio look like in 10 years
50% capital market, 50% real estate, etc.
Or another allocation.

There are many possibilities here.