Is our new building realistically financeable?

Hello forumites,

We are currently at the beginning of our new construction project (plot reserved with 500€, and so far only time invested) and I fear that now - after the euphoria phase - I have doubts whether we might be overextending ourselves financially or whether it is even realistically feasible.

General about us:

[*]Who are you? Married with one child
[*]How old are you? He 42; she 37
[*]Are there children? 1 (4 years old)
[*]Are more children planned? No
[*]What do you do professionally? He - engineer; she - office/administrator
[*]Are you employed, self-employed, retired, housewife, househusband, etc...? Both employed (both automotive supplier GmbHs)
[*]How many hours do you work? He 40; she 21

Income and asset situation:

[*]What income do you have (gross/net)? Net he 5200; she 1300 (both 13.5/14 salaries)
[*]How much child benefit do you get? 200
[*]Other transfer payments like parental allowance, sickness benefit, etc...? No
[*]How much equity do you have? About 50K
[*]How much of that equity do you want to put into the house project? Only incidental costs (property transfer tax + notary = about 7000)

Special features -
both foreigners from a third country, but no visa problems - settlement permit for many years (so far voluntarily not naturalized).
We don't have much equity because we financed an apartment in our home country ourselves for about 240K euros, so the cash is empty. Rental income starting this month about 350 per month but not counted as it can be used for the "home budget" and here no longer has to be given from income (as previously regulated).

Expense situation:

Housing costs:

[*]current cold rent 1150
[*]current warm rent 1350
[*]electricity 75
[*]gas included in additional costs
[*]water, sewage, garbage fees, street cleaning - included in additional costs
[*]telephone, internet, mobile phone - 100

Mobility costs:

[*]Car loan (or savings rate for a new car) both paid off, used but still in good condition
[*]Insurance 100 per month
[*]Taxes 35 per month
[*]Fuel 200 per month
[*]Repairs 50 per month

Insurance costs:

[*]Liability insurance (also animals) 10 per month
[*]Capital or term life insurance 85 per month

Living expenses:

[*]Groceries 500
[*]Restaurant/entertainment costs 400
[*]Daycare/school fees (and meal money) 250
[*]Child 300
[*]Donations 50 per month

Savings:

[*]Vacation 5000 per year
[*]Hobbies/gifts 2000 per year
[*]The rest is saved

Income and expenditure totals:

[*]Total income approx. 85K net per year
[*]Total expenses approx. 55K
[*]Balance
[*]Of which cold rent and dispensable savings (e.g., savings rate for house) 13800 per year

General about the property:

[*]How big is the plot? 770 sqm
[*]We want to build approx. 140 sqm
[*]Slight slope in the plot - with or without cellar will be decided after consulting the architect

Construction or purchase costs:

[*]Plot costs 120,000 + incidental costs
[*]Development costs - approx. 8,000
[*]Incidental acquisition costs (notary, court, property transfer tax, broker) approx. 7,000
[*]Construction or purchase costs (incl. architect, structural engineer) 400K??
[*]Additional construction costs (e.g., house connections, soil expert, construction power, etc.) No idea
[*]Outdoor facilities/terrace, paths, garden design, fences, etc. 50K??
[*]Financing costs (e.g., fees or commitment interest)??
[*]Total costs = 585K + 25K buffer = 610K

Other costs:

[*]Kitchen costs 20K
[*]Furniture, lamps, decorations - ??

Cost breakdown:

[*]Total costs 610K
[*]Deductible equity 10K (only incidental costs)
[*]Financing amount 600K

Hopefully you now have a picture. I don't want to put all the saved 50K into the house because that's really EVERYTHING we have in the bank, stocks, etc. included. And since it is not a purchase but a new build, we have no buffer for 1.5 to 2 years if something goes wrong until the building is finished.
My husband would prefer to put everything into equity now so it's less than 100% financing and continue saving in parallel during the construction phase until no full "double burden" with rent occurs.

More about us - we are both no "money geniuses." Money flows in and out and we are satisfied with that and not able to always optimize or invest or so.

My problem with this large sum is 1. our lacking equity, 2. our age and 3. both no crisis-safe jobs.

What do you think? Should we finance such an amount in our current situation regarding age and money?

Is there another amount that would be conceivable in terms of construction costs and more realistic for us and as a guideline?

If you need more info or specifics, I will be happy to write.

Looking forward to comments (deep breath) :)

P.S. construction is to be turnkey with little or zero own contribution, construction method is still open.

Old Swede. You can't finance 600k with that salary. I think the absolute max at your age should be 450k. Otherwise, it will get you.

400K was also my comfort limit. But you can't build anything with that, I've just had to learn. Maybe buying an apartment is possible? Or not even that?

I would see it differently. You have a net income of €6700 including child benefits! 40% of that is just under €2700 possible installment. With that, you can still pay off €600k by retirement. However, I still agree with your husband that I would use at least a bit more equity. You benefit from the lower interest rate throughout the entire term. With such low equity, you simply cannot keep such a large buffer. I haven’t quite understood what is going on with the apartment in your hometown. That would of course change things significantly.

The apartment is definitely doable. I would distance myself from the house unless you both can work full-time and increase the joint net income to at least 8,000 per month.

40% rate is way too high. You also have to pay additional costs and build reserves.