Is house construction financing possible at all?

What kind of craftsmen do you know? With the desired rate, I would also rather advise against construction; the interest and cost situation is simply not favorable right now. On the other hand, at least here, existing houses are hardly any cheaper. They are still listed in the portals at nearly new-build prices (as if we were in 2020 when the interest rate was below 1%), but then you still have to renovate and face high additional purchase costs. I would only undertake a renovation if you can actually carry out the necessary work cheaply and come up with an honest overall calculation.

Hi, calculate this: €1700 maximum burden for the house, at your age maximum another 25 years, results in about €340k financing limit. Equity goes towards the plot. €340k divided by 140 sqm results in €2,400/sqm, you don’t build for that today, not even with lots of subsidies. Unfortunately. Alternatives: increase the burden further: €2,300 allow construction costs of €3,300/sqm, which is realistic. Is €2,300 feasible? Currently, you have €2,863 left (before deducting rental costs). Your ancillary housing costs will increase. Reserves for the house are also necessary. The construction costs do not include furniture, kitchen, moving costs, outdoor facilities, etc. So rather not feasible. Buy? €500k purchase price plus additional costs are €550k minus equity equals €475k financing need. So that also results in a significantly higher monthly burden than targeted. Difficult situation.

€2,300 would theoretically be possible but the risk is way too high. As soon as something breaks (e.g., car) then we would have a real problem. My parents have a house, that could theoretically serve as a loan/guarantee but that option absolutely does not come to mind. Yes, I think wait and hope that interest rates normalize again and/or that existing houses finally drop in price. What needs to happen so that we can afford it? Significantly higher equity? How much and/or higher installments (thus higher salary or new job? :) ). Really a bad situation because we are not getting younger and eventually the break-even point moves very far back... Thanks to everyone

The thing about getting younger is just a phrase anyway. My parents built at 60/62. We are currently at 41/43. I also advise against building in your situation. I imposed a rule on myself: being able to afford 20% of the actual income for the installment, I don’t go above that. And last year it was time. Fortunately with very good interest rates for the term (1.2% over 15 years, 100% financed, additional purchase costs covered with equity).

My parents have a house that could theoretically serve as a debt/collateral, but this option does not even cross my mind.

The parents' house also does not help to pay your monthly installments.

With a maximum income of €4,863 (if your wife works again), we calculate a flat €2,500 living expenses allowance. Accordingly, you could theoretically spend €2,300. But as you already say, it will be tight and requires your wife to work full-time. Whether that will be fun with children...

Yes, I think wait and hope that interest rates normalize again and/or the prices of existing houses finally fall.

The latter will happen. The interest rate trend is currently still rising.

I imposed the rule on myself: being able to allocate 20% of actual income for the installment,

With that, as an average earner, you can neither build nor rent an apartment.

The whole getting younger thing is just a phrase anyway. My parents built their house at 60/62. We are currently building at 41/43. I also advise against building in your situation. I imposed the rule on myself: being able to afford 20% of the actual income for the installment, I don’t go beyond that. And last year it was finally time. Fortunately, with still very good interest rates for the term (1.2% for 15 years, 100% financed, ancillary purchase costs covered with equity).

Numbers without context or of what 20%? Of 5000 euros you don’t get anything nowadays. Just that we are currently moving towards 4.5%

Yes, I think waiting and hoping that interest rates normalize again and/or that existing houses finally drop in price.

The former is happening right now. This zero interest rate policy is abnormal and has driven prices to unimaginable levels, fueled by various crises. Currently, building is difficult because interest rates have already risen, but costs have not fallen yet. The market does not regulate itself that quickly. My forecast: interest rates will rise further. Costs will fall eventually.

To be fair, one must also say that from a higher perspective, the single-family house model is not very lucrative: few people with comparatively high space requirements and high energy costs (in construction and living). Additionally, the state simply earns more from multi-family houses. So much for #Offtopic.

We built for the first time in 2001: interest rates at 5.25%. Back then, the remaining part of the salary for living expenses was significantly lower than what is calculated today (even adjusted for inflation). And it was tight, and there were no vacations possible in the first years. And yet it worked.