Is financing a new single-family house feasible?

I also see the 35% limit as somewhat too strict in a way. These are guideline values that don’t always fit. Let’s assume you have over €5,000 net and earn €1,000 net more from a new job, then this would mean that you should only invest €350 of that per month in your dream property. It is also assumed here that you would spend €650 more on everything else. It may well be that you allow yourself a bit more since there is more available. But of course, you can also control that yourself.

The last sentence is very important. If I build a house and have budgeted tightly financially, then I have to avoid lifestyle creep. If I spend most of the extra salary on other things, then that’s my own fault.

Especially when you can’t properly estimate the costs for the child yet.

From my own experience, I can say that the costs will at least partially adjust to the available resources. For example, before we knew we could build, we spent significantly more money on expensive clothes than we do now. But yes, an exact estimation of the costs is naturally difficult because every child has different needs. However, you can estimate the costs for a baby much better than for an older child.

Certainly, everyone differs in what behavior is important to them. Or whether a vacation etc. is enough. And let’s be honest. A family vacation to Mallorca during the holidays costs about €4,000 even at a 4-star hotel, if not more. And well, whether that is necessarily luxury for everyone is another question.

But the children of the OP won’t be in school for several years yet, and until then you can also travel much cheaper in the low season. And when the kids are in school, the household income will also be higher.

And if you have to think twice about whether to go to a restaurant with the family or do some leisure activities just because of a house, I already find that borderline. Whether both parents really have to work full-time quickly and grandparents always have to help out because of the house, everyone has to decide for themselves. There should be a certain buffer. Otherwise, I’m forced to get another loan for a car repair.

I definitely agree with you there.

Especially if you have collective agreements where you automatically earn more after a few years of service. But I wouldn’t speculate on that either. And changing to a fixed-term job is also associated with risk despite a higher salary. Things can go wrong sometimes.

It also strongly depends on the sector. Especially in highly demanded professions, salary increases can be much higher than in jobs with collective agreements. In the IT field, it’s not uncommon to double your salary within a few years if you are in the right niche. Of course, there are also sectors currently doing rather poorly where you can’t expect big salary jumps. But the OP has mentioned that his salary should still increase in the coming years.

The last sentence is very important. If I build a house and have calculated financially with a tight budget, then I have to avoid lifestyle creep. If I spend the extra salary mostly on other things, then it's my own fault.

From my own experience, I can say that costs will at least partially adapt to the available means. Before we knew that we could build, for example, we used to spend significantly more money on expensive clothes than we do now. But yes, an exact estimate of the costs is of course difficult because every child has different needs. Although you can estimate the costs for a baby much better than for an older child.

This statement is probably, in retrospect, the key to success for many wealthy people.
It feels like 50% of my circle of acquaintances spends their money on nonsense every month, without sense or reason.

For quite a few homebuilders, the first 10 years are really tough. Usually, children arrive. Garden, driveway, and small stuff are more expensive than "originally planned."
Most manage this through other restrictions – but 10 years later, they are also significantly better off financially than if they had rented.

What you can save and what you want to save – those are two different things!

I see it this way: Actually, you should currently finance €515,000. The "little" equity you have is more of an emergency reserve, because despite the fixed price from your house builder, you will have additional costs. 100% financing with 2% repayment and 20 years fixed interest period (3.49% interest rate) results in a payment of just under €2,300! This is not feasible with your net household income. Currently, no bank is willing to take this risk to finance so tightly.

I would do it, what if you earn 1,000 euros more in one year? And the construction costs/prices etc. have risen by 10% again? And that is probably not far-fetched with nearly 10% inflation.

I wouldn't do it. We don't even know what professions both have. 1000 € net more within a short time is a big deal. When changing jobs, there is also the risk of initially having a fixed-term contract. Parental allowance is the maximum amount at 1,800 €. That would be 2,800 € net in tax class 1. Maybe more will come if the woman goes to work full-time.

It will be a 100% financing with a bad interest rate. Equity is hardly available. And you shouldn't spend everything. Having about 10,000 € as a reserve in the account is not a bad idea. Something extraordinary can always happen. And since hardly anything will be left at the end of the month, it's all the more important not to have all the equity tied up.
Normally, it actually looks like this. If hardly any equity is available, the bank will only go along if the income is secure and also high.

If there are alternatives, e.g. rent significantly lower than repayment/interest burden, I'm with you. But at least in Stuttgart, we don't have those. Just keep the structure at minimal repayment and invest the surplus...