How much can we afford?

A friendly HELLO to everyone,

I found this forum while searching for information on the topic of homeownership. I hope I am in the right place with my thoughts/questions.

We are 35(f) and 40(m) years old and currently still live in a 70sqm apartment that we moved into 13 years ago as students. We were actually satisfied here for a long time; as students, the apartment was a luxury, but now we need more space... since the rents are ridiculously high (cold rent from 1000), we are considering buying something of our own. However, we just can’t warm up to a condominium, but we are currently trying to find out if it’s enough for a house (new build)…
We had an orientation meeting with the house bank, but I somewhat doubt their figures (they want to earn, after all).

Therefore, I ask you for your assessment: how much loan do you consider feasible?

Our income amounts to €4950 (company car already deducted) or it would be €5250 without the company car.
We could contribute about €100,000 in equity, then we still have money for incidental purchase costs, a new kitchen/furniture, and an emergency fund.
We have no children and none planned. I think we are now at the age to be sure about this.
We like to live “well” but not extravagantly. We also want to be able to take vacations from the house twice a year, but we don’t need long-distance trips. South Tyrol, France, or Croatia is completely fine for us.
We save relatively consistently about €2000 per month, plus special payments like bonuses, Christmas money, etc. We pay a modest rent of only €700.
We can imagine paying off about €1700 per month, although we find it difficult to estimate what kind of ancillary costs and reserves come with homeownership.
The house should be paid off in 25 years…

How much loan do you consider manageable at our age and with our income? When does it all become financial madness?
According to the bank, the amounts are dizzyingly high!

Best regards and many thanks in advance,
Mine

I am rather the frugal type (still waiting for my first vacation in life) and would rather ask the opposite question: not "how much house can we (just barely) afford?" but rather "how much house does it really have to be?" So what are the minimum requirements, does it absolutely have to be a new build... The banks are definitely willing to load you up with loans until you can get dizzy. They just look at what is maximally possible. I wouldn’t necessarily take that as a benchmark but rather look at what the market offers and how much a decent house would cost at minimum. And then consider whether extra features, space, etc. really justify the extra cost (and mountain of debt). You don’t want children, for example (as we also don’t, which is why I find the statement "da sind wir sicher" absolutely acceptable), so you don’t need to plan additional space as future security. So I wouldn’t let myself be dazzled by the banks’ high offers at first but would determine the need and then calculate what it would cost monthly. Probably (?) that would result in a considerably lower financial burden depending on the desired location and features. But how high the corresponding payment would be in the end, provided it is still within the realm of possibility (which the banks then have to decide), whether one is then willing to pay that rate for the value "house," one has to decide for oneself. We were lucky to have bought before the boom (2012 – just barely). And our house cost exactly as much as the 70 sqm rental apartment, so the decision was easy. Certainly not so easy today anymore.

The numbers look good. Can you get plots of land from you, and - much more importantly - how much does the sqm cost with you?

With an assumed 3% repayment and a desired rate of 1,700 euros, you are currently looking at around 400,000 euros in possible loans. Given your household income and available equity, the bank would probably give the green light quickly. Minus additional costs, a house in the price range of 400-450k is realistic, possibly even a bit more without an agent and major modernization needs. The question is probably more whether there is "something decent" for you in the region, especially since rents are so high!?

With an assumed 3% repayment and a desired rate of 1,700 euros, you currently end up at around 400,000 euros in possible loan.

So €400k loan + €100k equity = €500k purchase price of the property, since you wrote that the ancillary costs are also paid from equity.

Thank you for the answers. I am surprised that you mention such high amounts after all. The bank hasn't really exaggerated then.

It's barely possible to get a building plot here, with prices per square meter between 350-450€. What you occasionally find are houses from developers. They buy a huge piece of land, develop it, and build several identical houses on it.

These are then offers around 420,000-450,000€, but then you want one or the other extra, better equipment, a buffer, etc. Outdoor facilities are usually not included or only partially included.

Roughly, I calculate 520,000 for the house, land, incidental building costs... That would mean notary, property transfer tax, etc. from equity, then there would still be 100,000 equity left for the actual house and we would need about 420,000 loan. According to the bank, no problem, but I’m not so sure.