Is financing feasible? New condominium construction 930,000 with equity 170,000

Hello everyone,

we have been planning to buy a condominium for a long time, and now we have found a great offer. However, I have many question marks and doubts about the feasibility in the calculation and therefore hope to get some input from you.

General information about you:

[*]How old are you?
M: 48
F: 47

[*]Do you have children?
Yes, son, 5 years old

[*]What do you do for a living?
Both employed, bank/insurance

[*]How many hours do you work?
Both full-time

Income and asset situation:

[*]What income do you have?
Net total 9,000 €

[*]How much child benefit do you receive?
219 €

[*]How much equity do you have?
Equity 215,000 €

[*]How much equity do you want to put into the house project?
170,000 €
Of that, 70,000 should cover the incidental purchase costs and 100,000 equity for the construction financing.
From the rest, further costs of about 20,000 € for moving, kitchen, and miscellaneous are planned, plus a safety buffer of about 25,000 €

Expense situation

Housing costs:

[*]current cold rent: 900 €
[*]current warm rent: 1,180 €
[*]electricity: 110 € per month
[*]telephone, internet, mobile phone: 35 €

Mobility costs:

[*]monthly ticket for bus and train (also for the children!)
[*]car loan (or savings rate for a new car)
[*]insurance
[*]taxes
[*]fuel
[*]repairs
[*]miscellaneous
[*]Is there a second car, motorcycle, scooter? Please specify all points again!

Insurance costs: 330 €

Living expenses: 900 €

School fees: 1,200 €

Savings:

Other expenses: 0 €

Income and expense totals:

[*]total income
[*]total expenses
[*]balance
[*]of which sum cold rent and dispensable savings (e.g. savings rate for the house)

General information about the property:

[*]How large is the plot? 640 sqm
[*]New construction 2022
[*]Garages? 1x underground garage, 1 carport
[*]How large is the living area: 170 sqm
[*]What is the market value of the plot and house after completion?

Construction or purchase costs:

[*]Purchase costs: 930,000 €
[*]Incidental acquisition costs: 70,000 €

Other costs:

[*]Kitchen costs: 12,500 €
[*]Furniture, lamps, decoration: 5,000 €

Cost summary:

[*]Total costs
[*]deductible equity
[*]financing amount

Necessary loan information:

[*]Loan amount: 830,000 €
[*]Loan type: annuity loan
[*]Interest rate: 1.3 %
[*]Fixed interest period: 20 years
[*]Remaining debt at the end of the fixed interest period: 286,000 €
[*]monthly rate: 2,316 €
[*]Special repayments possible? yes, cautiously estimated at 7,000 €

What do you think about this? I currently see two major "problem areas":
(1) Remaining debt after 20 years is still 286,000 €
(2) About 1,500 € remain monthly after deducting all costs

Is such financing realistic?

...
How much equity do you have?
Equity 215,000
...

That is good :)

...
What income do you have?
Total net 9,000 €
...

That is also (quite) good! :)

...
School fees: 1,200 €
...

Per month? :eek:

...
Purchase costs: 930,000 €
...

Wow! That is less good!

...
Kitchen costs: 12,500 €
Furniture, lamps, decoration: 5,000 €
....

Is that enough?

...
(1) Remaining debt after 20 years is still 286,000 €
...

That is a lot of "wood"? What is supposed to pay that off? The pension?

...
(2) Approximately 1,500 € remain monthly after deducting all costs
...

Is it already taken into account that a house usually causes more additional costs than a rental apartment?

I currently see two major "problem areas": (1) Remaining debt after 20 years is still €286,000

I see that too.

(2) Approximately €1,500 remain monthly after deducting all costs

You are switching from €1,180 warm to almost €3,000 warm. Can you manage that with your lifestyle? Those are the only two points. Basically, the income is completely sufficient for such a rate.

If you already factor in 1200 € school costs for your son, it probably won’t get any less if he maybe does a semester abroad, etc. I know very well-off parents who have all handled it differently. From paying 900 € for a 20sqm room in London to boarding school costs of 3500 € or the option "We’ll give you 500 €, the rest you have to manage yourselves." … no idea how it is for you, but that’s only 10 to 15 years away anyway....

I find the repayment rate too low for your age, sorry. We borrowed exactly half and have a rate at 1.66% of €1604 plus €400 [NBK].

I've had the feeling for a while that the builders simply take out larger loans but do not increase the repayment rate proportionally. Even the planned special repayment of €7k is a joke considering the amount.

(2) Approximately €1,500 per month remain after deducting all costs

I can't quite understand that yet, as some costs seem to be missing in your post? Mobility costs and others (leisure, etc.) are missing.

With the mentioned financing amount, income, and age, I would have expected a rate of around €3,500 per month (and also consider it affordable). Where does all your money go? €3,000 car per month?