How much repayment is advisable for how much net income?

Hello dear community,

to get straight to the point: How much do you pay off monthly, with what net household income?

Now the detailed story:

This post is mainly addressed to young families who are in a similar starting position as we are. We now have the short-term opportunity to purchase a plot of land. Because of this, our plans, which we have been working on for about a year, have suddenly become very concrete. This is probably one of the reasons why I am slowly getting cold feet and becoming anxious about the finances. We have already had the offer from the developer for a long time as well as various financing offers.

Available net income: approx. €4350.

We both work full-time and are permanently employed. We have no children yet. At least one is planned in the next few years, a second if it is financially possible.

At the moment we live very cheaply. For this reason, we put aside at least €1200 per month. We receive 14 as well as 13 salaries (collectively agreed) and are thus able to still go on vacation together and live well despite saving.

From the bank’s side, with our current plan, we would expect a monthly rate of about €900 with a 20-year fixed interest period. The additional costs would of course also increase.

If we make a special repayment of a little more than 1 additional salary per year, we would be almost done after the 20 years. According to the current status, this would be no problem at all. We could continue to save and build reserves.

I am mainly worried about the children. That is an absolutely incalculable factor for me. I cannot estimate what costs will arise from this. In addition, due to parental leave, one salary will partially be lost for 1-2 years. In these years, special repayments will probably not be made. Thus, 20 years will no longer be enough. Afterwards, it will be part-time at 75%. Of course, I have calculated the available net income for the different constellations and still come to about €4000 with 75% part-time.

Now I have written so much. What I actually want to know: Are there young families who have built, who also have approx. €4000 net household income and pay off about €900 monthly? How did it work out for you with parental leave? Did you have to restrict yourselves a lot because of the children and the part-time?

I am just afraid that in the end you have to hold back so much that you lose the joy of owning your own home. My problem is that we currently really have a lot of money available. We have a household budget book, know where the money goes, and know that we can afford this at the moment. We also estimate that this will still work with part-time after one child. But these are all just estimates. I know that such things cannot be answered in general because everyone is different. Nevertheless, it would do me good to hear that other people in a comparable situation manage this without problems.

Best regards

By repayment you surely mean the annuity?

We pay 1,200€ monthly on 3,800 net with one child ([Kita zahlt unser Arbeitgeber]) and are probably at the lower end of the food chain here in the forum.

However, we only have one car left and vacations will likely be difficult in the next few years. ([Urlaubsgeld und Jahresprämie wandern in die Außenanlagen])

But we were aware of that beforehand...

The wild life is over once you have a child and your expenses will shift from dining out, long-distance trips and cinema to baby clothes, [Banyschwimmen] and day trips to the zoo.

Best regards

Ferdi

Available net: approx. €4350.

How is this amount distributed among you? Are the incomes roughly equal or very different? Are you rather at the beginning of your professional career? In companies that pay 13th and 14th monthly salaries, an engineer can actually earn more. (I equate "available" net with the transfer amount; you may see it differently?) I have no problem paying off for longer than 20 years ...

By repayment you surely mean the annuity?

Yes, of course. I expressed myself unclearly.

The party life is basically over once you have a child, and your expenses will shift from going to restaurants, long-distance travel, and cinema to baby clothes, baby swimming, and day trips to the zoo.

We also suspect that there will be some kind of shift and that this will balance out. But I didn't want to rely on that.

How is this amount distributed between you? Are the incomes roughly equal or very different?

Are you rather at the beginning of your careers? In companies that pay 13th and 14th monthly salaries, an engineer can usually earn more. (I equate "disposable" net income with the transfer amount; you may see it differently?)

I have no problem repaying for longer than 20 years ...

Yes, we are still in the first third of our working life. Disposable net income is what is transferred monthly. In other words, all deductions still have to be deducted. Bonuses are a separate matter. The ratio is about 60/40. For her, it’s public service and thus hardly any room to grow. For me, I cannot estimate the development. In such a case, I assume the worst case. This assumes no increase (apart from inflation adjustment).

It looks similar for us, we pay 840 euros (but over more than 30 years as full repayment). 2 children, I work 60%. Of course, it depends a lot on the expectations, but I think you can live worse. Of course, we have to budget and vacations/new cars have to be well considered and sometimes wait 2 years. Otherwise, we afford almost everything we need or want. Tip: You shouldn’t rely too much on special repayments – realistically, very few manage that. And if you do, I think it stresses you a lot. That’s why we have a fixed interest rate for a long term – without the option for special repayments (which you can do anytime after 10 years anyway). Have you had the Allianz calculated? It was unbeatable for us. Another thing to consider is that 75% work with a toddler, preschool child, schoolchild is already challenging and depending on the region causes significant childcare costs. Or you have grandparents etc. who help care. But deciding now to return immediately at 75% I find brave. It’s no coincidence that many mothers stay at 20/25 hours a week for the long term. The household needs to be done and everything else that comes up. Ideally, there should still be some family life left! The deficit during parental leave is calculable and very limited in time – that shouldn’t seriously throw you off now (put a few thousand aside beforehand). The years after have to work!

We pay 1750 € monthly (due to the additional financing). In 2 years then 1400 € monthly. We have a net income together of 5200 €. My husband also pays child support for 2 children and we have one together. The little one goes to daycare and we currently pay 460 € for it. We both work full-time. I took 10 months of parental leave. It was ideal for us. For the planned number 2, we will do the same, but we will also save a lot from mid-year onwards for it. I receive a 13th salary, and in a good economic situation also a big bonus about the amount of one net salary. That is used for smaller vacations and the outdoor facilities. At least for the next 3 years. I think then the worst should be over.