Is owning a home feasible for us or too much of a risk?

Hello everyone,

I think this question is surely often asked/has been asked. But even though I have read a lot so far, we are still very uncertain.
I am 27 and my life partner is 25 years old. We currently rent and our dream is to have a nice home of our own where we could then start planning a family.
We have already calculated what we would have left per month for a loan. First, here are the details for you:
Current cold rent: 600€
Warm rent: 860€
Income 1: 2000€ net
Income 2: 2000€ net
No other income.
From the income, I always had the feeling it is not little. But we did not want to calculate with 4000€ because if children come, the second income would be reduced, and she would like to take parental allowance and parental leave after 12 months and only work 20 hours.
That means we calculated with an income of 3000€.

Now, of course, we sat down and wrote down the expenses, where I then stood with big eyes in the end. Maybe we made a mistake and miscalculated somewhere. Therefore, it would be great to get tips or hear your experiences.

Expenses:
Car insurance (2 cars are needed): 150€
Mobile contracts (2x): 50€
Internet & phone: 25€
Sky: 30€
Groceries including drugstore and household supplies: 500€
Parking for work: 40€
Private pension: 100€
General savings contract: 50€
IG Metall: 30€
Fuel (maybe calculated a bit high but if you build outside maybe): 250€
Dog: 120€
Gym: 40€
Utility costs for the house (we have no real idea yet but assumed 500€ including electricity according to the internet): 500€
Car loan: 250€

Total expenses: 2135€, which means we would have only about 865€ left for the loan repayment and that does not include any reserves.
Sure, you have more money left if no children are there yet or if both work full time again. But you should always assume worse scenarios.
Therefore, we are currently a bit scared. Of course, the car may eventually be gone, but if you need a new one or something else, you don’t always have that money just available.
There is currently no great or good selection for buying a property. So we thought of a new build with a prefab house manufacturer. Since we have to spend about 60,000€ for the plot in our area and a suitable house costs about 200,000€, we would have to borrow at least 300,000€.

What is naturally bad for us is that we have no equity. I simply missed that and it was stupid, but now it is unfortunately like this. We might be able to save about 10,000€ by next year if it goes well.

It would be great to get good advice so that we don’t have to be so afraid or that we miscalculated somewhere or whatever.

The missing equity is of course already a major disadvantage. Most banks will require equity from you. Roughly speaking, you would have to finance well over 100%, as in addition to the pure construction/purchase, there are also kitchen, furniture, and many other acquisitions. In addition, there are ancillary purchase costs such as notary/land registry fees.

Building the house will also cost at least €350,000 for a "normal," i.e., not the very lowest quality, house (including land). The costs are open-ended on the upper side...

Hello everyone,

I think this question is surely asked/has been asked often. But even though I have read a lot so far, we are still very uncertain.
I am 27 and my partner is 25 years old. We currently rent and our dream is to have a nice home of our own where we can also start planning a family.
We have already calculated what we would have left each month for a loan. First, the data for you:
Current cold rent: €600
Warm rent: €860
Income 1: €2000 net
Income 2: €2000 net
No other income.
From the income, I always had the feeling it is not little. But we did not want to calculate with €4000 because when children come, the second income will be reduced. And she wants to take parental allowance and parental leave after 12 months and only work 20 hours.
That means we calculated with income of €3000.

Now we obviously sat down and wrote down the expenses, where I ended up standing there with big eyes. Maybe we made a mistake somewhere and miscalculated. Therefore, it would be great to get tips or hear your experiences.

Expenses:
Car insurance (2 cars are needed): €150
Mobile contracts (2x): €50
Internet & telephony: €25
Sky: €30
Groceries including drugstore and household supplies: €500
Parking for work: €40
Private pension: €100
General savings contract: €50
IG Metall: €30
Fuel (maybe calculated a bit high but if you build outside the city): €250
Dog: €120
Gym: €40
Incidental house costs (we don’t have a real idea yet but assumed about €500 with electricity and everything according to the internet)
Car loan: €250

Expenses total: €2135, which means we would only have about €865 left for repayment and no reserves are included.
Sure, you have more money left if there are no children yet or if both work full-time again. But you should always assume a worse scenario.
Therefore, we are currently a bit scared. Sure, the car expense might disappear at some point but if you need a new one or something else, you don’t always have the money readily available.
Buying a property currently offers no big or no good selection. Therefore, we thought about a new build with a prefab house manufacturer. Since the plot in our area costs about €60,000 and a suitable house costs about €200,000, we would have to borrow at least €300,000.

What is naturally bad for us is that we have no equity. I simply missed this and it was stupid but now it is unfortunately the case. We might be able to save about €10,000 by next year if it goes well.

It would be great to get good advice so that we don’t have to be so afraid or maybe we miscalculated somewhere or something.

No equity + no high income = bad idea..

Hello Oliver,

House ancillary costs are set relatively high at 500€ per month, but basically Steffen is right: without equity and with a desire to have children, it won’t work.

You are currently spending about 2500€ including warm rent, which means you could save 1000€ per month, ergo save about 25K€ in 2 years. That would at least be enough to cover the ancillary purchase costs somewhat.

In addition, when you have children, not only does the income decrease, but expenses also increase, so you are not poor with currently 4K€ net, but that is simply not enough for child(ren) and a 100% financing. In that case, rather take the detour via a condominium or save for a few more years.

Best regards
Dirk Grafe

From the income, I always had the feeling that it is not little. But we did not want to reckon with 4000€ because when children come, the second income is reduced. And she would like to take parental leave after the 12 months of parental allowance and only work 20 hours.
That means we calculated with an income of 3000€.

??? Parental leave now, how long? 1 year or longer? During parental leave, you get parental allowance (12+2) or parental allowance plus.

The claim to childcare is legally existent in Germany, but in many places only on paper.

By the way, you forgot the childcare costs for daycare mother/daycare/kindergarten. Depending on the region, it can also be 200-300€ or more for the first child.

Regardless, if you now apply your 865€, then with a 4-5% annuity (interest + repayment) a loan between 205k-255k is possible.

If you apply your previous saving habits, then even less, because you can only really calculate the cold rent.

I think you should now think about what is important to you in which order, and when, and consider how to get there or what is missing. For example, save equity for that.

Maybe you will get a plot of land that can remain unused for now. Then you could pay it off first and build on it later. Otherwise, take a look to see if you can find an acceptable plot of land. Maybe it is so conveniently located that you can save yourself a car. When will the car be paid off?