Is building a house feasible with this equity and net income?

Hello!

I have a question about our construction project:

Single-family house in Recklinghausen. The plot is already reserved (but not yet purchased), costing 130,000€ including additional costs.
The house including additional costs comes to about 320,000€ => 450,000€ total costs.

Framework conditions:
Net income HE (33 years): 3,200€/month in a very secure job + ~7,000€ annual bonus
Net income SHE (29 years): 1,900€/month (part-time 66% position) + 80% of one salary Christmas bonus
One child is present (~1 year): + 189€ child benefit; a second child is planned in 1-2 years => She will receive about 1,350€ parental allowance for 12 months, then about 1,900€ salary again
The net incomes are all based on tax class 4/4. Effectively, with the choice of 3/5, it is correspondingly a little more.

Equity capital: ~70,000€ liquid (through own savings, including buffer); 10,000€ tied up, will be freed over the next years.

Currently, we have a cold rent of about 680€ (warm 920 + 100 electricity) and a monthly savings rate of about 1,400€ (without annual bonus and Christmas bonus).

From your point of view, is sustainable financing possible here or are the total costs simply too high? We would have the option to switch to another plot in the same building area with 150 sqm less space and a semi-detached house instead of detached => about 60,000€ less cost. We could definitely live with that, however, the dream is a detached house.

I look forward to your answers and remain with kind regards,
Sebastian

At an interest rate of 2 percent and 3 percent repayment, you can expect a rate of about 1600 euros. That should fit with your savings rate plus cold rent. Your income is very good. Basically, I would see no problems. We have seen quite different things here in the forum.

The net incomes are all based on tax class 4/4. Effectively, when choosing 3/5, it is correspondingly a little more.

Why do so many people actually believe that? With 3/5 you will almost certainly have to pay additional tax...4/4 with factor is the safest option!

Why do so many people actually believe that? With 3/5 you will almost certainly have to pay additional... 4/4 with factor is the safest option!

We have 3/5 and have never had to pay extra, but always got money back.

Hello,

thanks for the answers

At an interest rate of 2 percent and 3 percent repayment, you can expect a rate of about 1600 euros. That should fit with your savings rate plus cold rent. Your income is very good. Basically, I wouldn’t see any problems. We have seen quite different things here in the forum.

Thanks for your opinion! I think I would prefer 2% repayment and work with special repayments (of course, I know the statistics on special repayments, but I am quite sure to use them). Alternatively 2.5% repayment to gain a bit of flexibility.

Why do so many people actually believe that? With 3/5 you will almost certainly have to pay additional installments... 4/4 with a factor is the safest option!

That’s why I said "a little more". Of course, with 3/5 you generally pay additional installments, but with 4/4 you usually get a little back. On average, I get more per month than with 4/4... not much, but more. The best option is 3/5, invest the difference, and pay the rest at the end of the year, keeping the interest (ok, in the current interest rate environment you won’t get rich that way...).

One quick question on the topic of equity calculation by banks: Assuming we have 70 k€. The house costs including incidental costs 450 k€. Do I then have 70/450 % equity, or are the incidental costs etc. deducted before forming the percentage and removed from numerator and denominator (and correspondingly a lower percentage equity)?

Additional costs are not included. A 100 percent financing means financing the house and land without additional costs. If these are financed as well, it is referred to as 110% financing.