Maze2020
2020-08-07 08:19:09
- #1
Hello everyone,
I am Maze. Until now, I have always been a silent reader. But now I would appreciate an assessment from you experts on whether our planned construction project is feasible at all or if we should wait. A few years ago, we bought a small older house (remaining debt approx. €90k), renovated it, and now want to build an extension here (age-appropriate, all on one level).
About us:
Net income together approx. €5,800 / month
No children and none planned anymore
Expenses:
Living expenses approx. €1,000
Loan payment for remaining debt approx. €650 (still running for 8 years)
Insurance, gas, electricity, garbage, car, fuel, phone, and other costs approx. €1,200
Current savings rate after deduction of all ongoing costs €2,600
Equity: unfortunately not much available (approx. €15k) because we put most of it into the house and renovated everything step by step
Our construction project:
We want to build an extension on our existing house (currently 80 sqm) on the ground floor to gain an additional approx. 90 sqm of living space on this level and make everything age-appropriate.
A cost estimate from an architect amounts to approx. €210,000 (extension, roof, façade, windows, bathroom, new heating system, etc.) plus €30,000 ancillary construction costs.
Since we are fairly cautious people, we have planned an additional buffer of around €30,000
which makes a total volume of approx. €270,000.
First offer from the bank is at 0.99 % for 15 years (unfortunately as a subordinated loan because the house purchase loan is not yet fully paid off). Planned monthly burden is max €1,500 (interest + repayment).
We are currently unsure whether we should undertake the project now due to our low equity or rather wait and save a little more equity (this was not really possible so far because we put all leftover money into the house). However, interest rates are currently very favorable and no one knows how they will look in 2-3 years.
Thank you very much in advance for your advice.
I am Maze. Until now, I have always been a silent reader. But now I would appreciate an assessment from you experts on whether our planned construction project is feasible at all or if we should wait. A few years ago, we bought a small older house (remaining debt approx. €90k), renovated it, and now want to build an extension here (age-appropriate, all on one level).
About us:
Net income together approx. €5,800 / month
No children and none planned anymore
Expenses:
Living expenses approx. €1,000
Loan payment for remaining debt approx. €650 (still running for 8 years)
Insurance, gas, electricity, garbage, car, fuel, phone, and other costs approx. €1,200
Current savings rate after deduction of all ongoing costs €2,600
Equity: unfortunately not much available (approx. €15k) because we put most of it into the house and renovated everything step by step
Our construction project:
We want to build an extension on our existing house (currently 80 sqm) on the ground floor to gain an additional approx. 90 sqm of living space on this level and make everything age-appropriate.
A cost estimate from an architect amounts to approx. €210,000 (extension, roof, façade, windows, bathroom, new heating system, etc.) plus €30,000 ancillary construction costs.
Since we are fairly cautious people, we have planned an additional buffer of around €30,000
which makes a total volume of approx. €270,000.
First offer from the bank is at 0.99 % for 15 years (unfortunately as a subordinated loan because the house purchase loan is not yet fully paid off). Planned monthly burden is max €1,500 (interest + repayment).
We are currently unsure whether we should undertake the project now due to our low equity or rather wait and save a little more equity (this was not really possible so far because we put all leftover money into the house). However, interest rates are currently very favorable and no one knows how they will look in 2-3 years.
Thank you very much in advance for your advice.