How much house is possible

Hello,
we have been reading along in this forum for some time now and then thought that we should register to ask a question.

We are at the very beginning when it comes to planning to build a house.
For several days now we have been wondering, how much house can we actually afford?

Here are our income and expenses.
I am self-employed with a small GmbH, my wife is a civil servant
monthly net income with [PKV] already deducted together: €3600
in addition, there is a condominium that is to be rented out with approximately €330 monthly rental income.

As equity, we have about €85,000 and the unencumbered condominium with a value of about €50,000.

It would be nice if you could give us a rough idea regarding the possible loan amount.
Thank you very much in advance

The question is actually more what you can/want to finance? I wouldn't include the rental income since you also need to build reserves for repairs etc.

Roughly estimated: 10 years fixed interest, 1% repayment, monthly rate approx. €1,000 => loan amount €250,000

Then you would have about €335,000 for house/land/additional costs

Thank you for your response,

We are currently approaching the matter quite naively. We know that we want to build a house, preferably very energy-efficient (passive house) as a prefabricated house and ideally around 180 - 200 m2.

At the moment, we are still paying off the apartment with €830 monthly, but this will end soon; on the other hand, we are currently able to save €550 every month without any problems.

We estimate the costs to be around €400,000, but we do not know if this is really feasible with the financing? According to some calculators on the internet, we should be able to finance more with our income, but we consider this quite unrealistic when you take the ongoing additional costs into account.

How does the bank, for example, treat the existing apartment? Or would it even make more sense to sell the apartment and use the proceeds as equity??

Regards

We were advised to sell the house instead of including the rental income as income.
As mentioned, you must/should use part of the income as a reserve for the apartment. It is rather appropriate to sell the apartment and use the 50,000 as equity.

On the topic of what I can afford:
When we inquired, as a couple I believe about €1,200 was necessary for living expenses. That includes everything you need (car, phone, vacation,....), and per child it was around €250 additional.
One should consider €1.50 - €2/m² living space for electricity/gas/water.
That means if there are only two of you, you should easily manage with €1,600/month for 200m² living space :eek:
So you could easily handle a €2,000 monthly repayment (no wonder so many have to sell their house after a short time......)

But back to your example:
Estimate roughly €1,500/m² living space as the purchase price for the ready-to-move-in house – then you would still have €50,000 for the land and additional costs....

On the financing:
400,000 ./. 85,000 ./. 50,000 (apartment) = €265,000 to be financed, so about €1,050 - €1,100/month under the conditions mentioned above

Regards
Andreas

Thanks again for your response,

That all sounds pretty much like what we had imagined. We had calculated a financing rate of around €1500 and ongoing costs of €450, including two different KfW loans.

Although admittedly, with €1600 we would almost make it. :D, but that can always change very quickly, so I can't quite understand how someone can calculate with a €2000 rate.

Thanks again for the information

Regards
Michael