Is financing for house purchase / house construction feasible?

Good day everyone,

I have now read into this forum a little and was able to learn a lot right away - thank you very much for that!

Now my partner and I are concerned with the topic of home ownership. Currently, we are still open and have no time pressure regarding this topic, but I want to collect information as early as possible in order to take the right step later. One point, of course, is the financial aspect. For this, I have already met with 2 advisors and heard different opinions. Now I am curious what you say about it.

First about us. We are 22 (she) and 27 (I) and have been together for 5 years. Our monthly income amounts to 4681 euros (+/-100 (additional income)). We both still have good potential for increase, but currently do not want to factor this in. Our current equity amounts to 30,000 euros. Currently, we have relatively low expenses and can save around 2200 euros per month. Loans or similar are paid off. One could say that - at least by our standards - we could save a good amount of money in the next few years.

Regardless of whether we want to buy a property or build ourselves, we estimate our financing framework at 300,000. The goal is to have a monthly installment of about 1000-1100 (without additional costs). The question we ask ourselves is: Should we take advantage of the currently good interest rates or save even more equity? Of course, we are aware that 300,000 for building a house (including land) is not much. Our demands are also not very high.

Thanks in advance.

It always depends specifically on where / what / how you want to build. Are the land prices so low in your area that you can get a house with land for 300k?

You have a good starting position. I would try to save enough equity over the next 2-3 years and buy a piece of land with that equity. This way you have a good starting position with a bank. Your salaries, which will probably still increase over the years, can certainly handle a larger amount...

That varies a lot. In the Mainz-Bingen district, we currently can't really afford a house, but in the Limburg area, it's more feasible (plot of land around 50,000 euros). We are relatively flexible regarding that.

If we build, we are very interested in a bungalow but do not rule out anything else.

The question I ask myself is whether by then the interest rate won't have risen so much that in the end I might have "lost" 2-3 years or not really end up much cheaper.

The question I ask myself is whether by then the interest rate will have risen so much that I might have "lost" 2-3 years or end up not being much better off.

In the last 30-40 years, interest rates have more or less steadily fallen. Currently, it doesn't look like they will rise in the short term either. I wouldn't worry about 2-3 years and would calmly save up more equity. You can already start looking around, and if your dream house/dream plot of land catches your eye at some point, then you strike.

we estimate our budget for financing at 300,000

Then there are only the following options:
1. super cheap plot at the adW and a manageable little house
2. normally priced plot and Tiny House
3. from €150k equity and it becomes a house
4. condominium
5. already secure a plot now (regardless of the price) = buy and plan calmly over the next two years and pay off the plot. That is also equity and plots won’t get any cheaper

The question I ask myself is whether by then the interest rate will have risen so much that in the end I might have "lost" 2-3 years or won’t really come out much cheaper.

If (and nobody believes that) interest rates rise sharply, construction prices will fall again. So you won’t really notice it that much. And we don’t need to talk about more than 0.5%.

I also think financing interest rates are less of a risk, rather further price increases. Construction prices will probably rise by 3-5% per year. Land prices depend on the area again.
Research market statistics, if prices have risen sharply in the last 5 years it can really be better to secure the land as quickly as possible (Warning there is often a building obligation).

However, I also find 300,000 EUR a bit too little.