Is buying a house affordable? How "good" are the conditions?

Hello dear forum!

We (my wife 31 and I 32, no children, but planned in the foreseeable future) are planning to buy a house. The house is already chosen, now only the financing remains.

The house, built in 2000 and in top condition, costs including all additional costs (property transfer tax, broker, and notary) 364,000€. The equity capital is 70,000€. Our salaries: I earn 2,450 net (private health insurance already deducted), civil servant, and my wife earns 1,100 net until 01.06.17, afterwards due to company takeover about 5,000€.

Here are the offers:

1st offer: 1,500 installment, 294,000€ fixed for 10 years at 1.15%.

2nd offer: 1,200 installment, 200,000€ fixed for 15 years at 1.15% and fully repaid after 15 years. 298 installment, 94,000€ fixed for 10 years at 1.15%. The remaining debt of about 72,000€ can be paid off by my home savings contract.

3rd offer: 1,200 installment 200,000€ fixed for 15 years at 1.15% and fully repaid after 15 years. 94,000€ fixed for 15 years at 1.67%.

My home savings contract will be due for allocation in 10 years in all offers. (75,000€, about 33,000€ saved. Loan interest rate 1.5%)

The offers are from our house bank. The offers from Deutsche Bank are significantly worse compared to these three offers. We are currently leaning towards offer 2. Have we overlooked anything? Which offer would you recommend?

Best regards and many thanks in advance for the answers.

If you actually stand at ~7.5k per month soon, the loan amount is a joke anyway. No matter how you twist and turn it. If I were you, I would focus on a higher special repayment option, so more than the usual 5%, e.g. 10%. If your wife's salary fluctuates, reduce the repayment rate or agree on the adjustability of the repayment and make a lot of special repayments.

1.15% for 15 years is fantastic.
In offer 2, the [Bausparer] is questionable. What is in it today, is the allocation on the cut-off date "certain," etc.

Your wife's salary jump is an issue. Is it "certain"? Is she being gifted/inheriting the company or does she still have to bring in equity or even financing, especially in the context of home ownership? Are the projected earnings really realistic and continuously expected at that level? A professional should evaluate that.

The house bank is always a good contact point with self-employment. I myself had the experience that you didn’t even have to knock at [Interhyp] and co., as you immediately fell through (or in other words: too much effort for the intermediary). If you go to the intermediary today, I wouldn’t say a word about the upcoming self-employment because you can just go back home. The target rate of €1200 would also be possible with the current income and should lead to approvals.

I myself would tend towards option 3 with the given information and pay off the more expensive tranche through special repayment. That shouldn’t be a problem at all in 15 years. You would have to tell something more about the [Bausparer], e.g. why you still hold it at all and don’t perhaps terminate it and directly bring it in.

Thank you for your reply Alex85,

regarding your questions:

The bank offers 10% special repayment on the loan amount per year for both loans.
The home savings contract is eligible for allocation after almost 10 years with a rate of 260€ per month and currently about 2000€ saved.
My wife is currently working under the low conditions because she is "given" the company and is getting to know her customers. The bank knows the financial statements of the past years and rates her income as "secured".

I did not want to terminate the home savings contract because after 10 years I can redeem the second loan through the home savings contract. Because I cannot say how the interest rates will develop in 10 years.

I didn't want to terminate a building savings contract because after 10 years I can repay the second loan through the building saver. Because I can't say how interest rates will have developed in 10 years.

If you don't switch directly to a Porsche with the doubled income, the house will be paid off after 10 years anyway or there will only be a remaining balance left that, regardless of the interest rate level at that time, will leave you completely unaffected.

I see it the same way regarding the topic of your wife's income situation... the only catch is that if she is pregnant, she will probably have higher personnel costs (just a guess)

Quick question

What are the 5000€ and what kind of company is it?
Is that a profit of a sole proprietorship? Is that a managing director’s salary of a GmbH?
Possibly quite a bit of taxes and insurance need to be paid on that. Or you have to build up a liquidity buffer in the company or or or. Especially with a company takeover, it can certainly be the case that, besides the purchase price (in this case 0€), you first have to invest money.