I basically see it in the green zone.
You already have one child, so both incomes can be considered largely sustainable and a high annuity is also feasible.
Financing the land initially as a variable loan is smart, so you’re not tied to one institution later on.
I would definitely also turn the car into cash, in 5 years it will hardly be worth anything anyway.
What would also be interesting: how far along is the planning regarding the construction? If a lot is already clear, you can of course get everything finalized now.
Maybe you can roughly present the project so that one can estimate how realistic the 440k is. That is usually the sticking point.
You can skip BU (occupational disability insurance), I’m completely on your line or that of . 1500€ is also too little, it just costs money and quite a bit at that. The money is better invested in special repayments.
Definitely take out risk life insurance, with insured party and policyholder crossed, then there are no problems in the event of emergency.
The loan-to-value ratio is calculated from the total value of the property (land + construction costs without incidental costs) compared to equity capital. The paid-off portion of the plot counts as equity capital.
You can start with 2% repayment initially, you’re young enough and because of the planned child it makes sense to put existing funds into special repayments, if then parental leave is scheduled you can go on vacation. You should make sure that a change in the repayment rate is possible.
I wouldn’t be afraid of 270k in 15 years, you are still in the middle of life and will be able to manage it even if interest rates then rise to 5% (which I don’t believe).
In my opinion, at the moment it is basically healthier for your sleep to have debts than cash assets.
As said, plan the project properly AND stick to the plan, calculate buffers, then it will work. A larger additional financing should be avoided, as that could make parental leave extremely uncomfortable.
I will now assume a property value of ~600,000€ and equity of 130,000€ (80k + 30k car + 20k further savings) and incidental acquisition costs of 10k.
This way you would reach exactly 80% loan-to-value and exit with very good 1.6% interest over 15 years at a rate of about 1430€.
Thank you for your effort and detailed reply.
Regarding the planning of the house and project:
It will be built and planned with an architect without builder ties.. largely turnkey without own work (or only to an insignificant extent possibly for outdoor facilities). Starting construction this year is no longer possible, we are still in preliminary planning and cost estimation.. no building permit will be granted before October/November, a positive preliminary building approval is available.
Flat roof house with 150 sqm living space with attached double garage, gas heating and central ventilation system (additional cost ventilation system 10-12k), no fireplace, no basement, 35 sqm terrace, 40-50 sqm driveway.. no frills but also not the cheapest materials to be installed.
Budgeted for house and garage medium standard: 330k (including interior finishing, floors, painting, etc.)
Incidentals (architect, structural engineer...): 55k
Development costs: 10k
Outdoor facilities: 25k
Interior furnishings: 25k (we don’t want a luxury kitchen and can reuse a lot from the old apartment)
Underestimated?
What is currently a common variable interest rate for the land?
Regarding the topic of commitment interest (Bereitstellungszins) for understanding:
Assuming we would already take out the house loan this year, but only fully need it at the beginning of 2020 (to complete the house construction), after 12 months from closing commitment interest would be charged? Can we also avoid that by simply drawing and repaying the loan fully, although the house is not yet move-in ready? Of course, we would have to shoulder the rent additionally, but that would probably be possible for us. The advantage would be that we could still secure a good offer this year.
Thank you very much already!