How is a 400k loan financible without equity? Net equity at €4,500

Hello everyone,

we have calculated the following with a house provider:

land €80,000
house €300,000
additional costs €55,000

these are realistic numbers for a finished house. At least here in our region.

that adds up to €435,000. Minus the subsidies, we come out at €420,000.
our income is €4,500 net. With a child in the future, it will not be less, as our salaries continuously increase. We always want to have at least €1,000 at the end of the month for saving or some spending. Therefore, the pain limit for the monthly rate is €1,250.

now we went to our bank and they told us that we can calculate €400 monthly repayment per €100,000. Meaning more than €1,600 repayment. Our pain limit is €1,250 monthly repayment. With that, we could just finance €300,000. We have no equity. No new build possible?

what do you think? What are your experiences? The independent financier of the house builder told us that it is definitely possible. Is he talking about huge special repayments? Where is the truth? We fear we might have to give up on building the house :/

no one talks about finances. Who can still afford a house then? What is your assessment?

now we were at our bank and they told us that we can calculate a monthly repayment of €400 per €100,000.

That is reasonable given the bank's risk, but it is also possible with less repayment.

Our pain threshold is a monthly repayment of €1,250.

That means a repayment of only 2% with almost 130% financing without a buffer for additional costs. Who pays for new furniture, kitchen, terrace, possibly painting and flooring, garden, paving the driveway? What is included in the ancillary costs?

No new build possible?

Possible, yes, but you are driving headlong into a wall. Additional foundation costs can break your neck right from the start. Banker’s opinion: Where is your money going if you haven’t saved any equity? How do you come to the conclusion that it will be better with a house? Why not an existing property or a condominium? I would not give you a loan as you wish - only with appropriate repayment. P.S. Real estate financing is my job

You get the worst conditions on the market with 0 equity. A friend has a similar volume and roughly the same salary. He consciously chose a house and makes compromises. For vacations, he goes to the sea or to family abroad. Hotels rather not. After deducting incidental costs and reserves, about 2k are gone. That leaves 2.5k for living... A terraced house or a semi-detached house would be more sensible if it absolutely has to be a new build. Where do savings remain if you want to build but have 0 equity?

We always want to have at least €1,000 available at the end of the month for saving or partially for spending.

Building a house and having €1,000 "left over" every month is mutually exclusive for most builders. Reduce that to €500 and you are at €1,750 instead of €1,250. If that seems impossible to you, building is probably not the best solution for you.

I agree with saralina. The house costs mentioned above are not particularly high, your income is fine. If you have previously prioritized consumption (and are probably young), I would recommend that you first save up equity.

house 300,000€

Well, at least with Hanse that can already be quite tight. You have to watch out here that Hanse likes to "push" the foundation slab "by the client" in the first "starting from" calculations. So price without or with foundation slab?

Who can still afford a house then?

Those who bring equity. Something between 20 and 30% would be nice. Since that certainly doesn't happen overnight, this is rather a long-term decision. Since you are thinking about building a house with 0 equity, your master plan was probably different so far?