Is purchasing a house and complete renovation affordable?

Long-term mortgage interest rates do not correlate with the key interest rate, so you don't have to worry about that. Look at the 10-year Euro SWAP and the mortgage interest curve at one of the major credit brokers – there you can see the real correlation. In short – the key interest rate has continuously risen, the SWAP and mortgage rates have moved sideways – with fluctuations.

Nevertheless, there will be no mortgage interest rates below 2% with a key interest rate level of over 4%. So there is some correlation after all, isn't there?

Still, there will be no mortgage rates below 2% with a key interest rate level of over 4%. So there is a certain correlation, isn't there?

Let's put it this way. The general interest rate situation with increased rates can be seen across all standard rates.

But regarding the specific correlation. It can also well be that the key interest rate rises by 0.75-1% and the long-term mortgage interest rates have nevertheless fallen precisely in the months of the rate increase.
Let me correct myself. Exactly that happened not too long ago. You can feel free to look at the charts from 2022 onwards.

What is actually more interesting is the development of the yield curve based on the swap midpoint. The strongly inverted yield curve reflected the market’s expectations of imminent rate hikes or, in the long term, falling rates again. Meanwhile, the inversion has noticeably receded. So the market no longer expects rates to rise much further (significantly). It is also assumed (see long-term rates) that interest rates will come back down again (but this will happen no earlier than mid-2024 to the end of 2024).

However, no one expects an interest rate level like in the recent past anymore = money will have a price again in the future.

Still, there will be no mortgage rates below 2% with a key interest rate level above 4%. So there is a certain correlation, isn't there?

Usually, there is a yield curve where longer terms have higher interest rates. Otherwise, one would simply invest ten times for one year instead of once for ten years. However, if it is expected that interest rates will fall again in the future, it can happen that shorter terms actually have higher interest rates than longer terms ("inverted curve"). 2% for 10 years at a 4% key interest rate is rather unlikely; 4% mortgage term at 4.25% key interest rate is quite realistic.

I deliberately did not say anything about the previously mentioned statements.

To give an update:
The architect says the complete renovation will cost 330,000 euros. (Own contribution about 50,000 euros) = 280,000 euros core renovation
Included in this are 200,000 euros for the energy renovation.

We have also spoken with our energy consultant. We plan the whole thing for 2 separate residential units, so that through program 261 of the KfW a loan amount of 300,000 euros for the energy renovation is possible.

According to the energy consultant, it will probably result in an Efficiency House 70 EE, so a repayment grant of 25 percent can be expected (15 percent for the Efficiency House 70 EE and another 10 percent because it is a Worst Performing Building).

The energy consultant roughly estimates the energy renovation costs also at 200,000 euros.

We now have bank appointments next week to discuss further

To give another update:

The energy consultant has sent us the renovation roadmap.

In short – the costs for the energy renovation amount to 205,000 euros (the architect estimated 200,000 euros).
Regarding the individual items

[*]Roof – 60,000 (12,000 euros subsidy)
[*]Heating, hot water, heating optimization – 60,000 (24,000 euros subsidy)
[*]Front door, ventilation – 25,000 (5,000 euros subsidy)
[*]Exterior wall, windows 50,000 (10,000 euros subsidy)
[*]Basement ceiling 10,000 (2,000 euros subsidy)

--> A total of 205,000 euros – of which about 50,000 euros subsidy

He said nothing about the costs that do not count towards the energy renovation.
The architect estimates 100,000 euros.

To give an update again:

The energy consultant sent us the renovation roadmap.

In short - the costs for the energy-efficient renovation amount to 205,000 euros (the architect estimated 200,000 euros).
For the individual items

[*]Roof - 60,000 (12,000 euros subsidy)
[*]Heating, hot water, heating optimization - 60,000 (24,000 euros subsidy)
[*]Front door, ventilation - 25,000 (5,000 euros subsidy)
[*]Exterior wall, windows 50,000 (10,000 euros subsidy)
[*]Basement ceiling 10,000 (2,000 euros subsidy)

--> Total therefore 205,000 euros - of which about 50,000 euros subsidized

He said nothing about the costs that do not count as part of the energy-efficient renovation.
The architect estimates 100,000 euros.

Regarding the subsidy, please note that there are only 60,000€ of eligible costs per residential unit and calendar year!

That means if you only have one heating unit (single-family house) and only submit applications in one calendar year, you will get a maximum of 24k subsidy (heating has the highest subsidy, but be careful here as well, you won’t reach the 40% with all models).

The cost estimates seem relatively realistic to me (roof depends on how large it is and whether moisture damage has already occurred to the roof structure); I would consider the heating more expensive (underfloor heating usually means raising the floor structure so that existing doors and frames can no longer be used, etc...), I think you probably don’t need controlled ventilation for that?

What strikes me is that you now want to insulate the basement ceiling. If the basement is very damp and you have 130 sqm of living space, I would rather tend to sealing and insulating it from the outside. Not an option? Of course, that’s more expensive, then 50k for exterior insulation won’t be nearly enough.

What else do you want to do for the remaining 100,000€?

Regarding the funding, please note that there are only €60,000 eligible costs per residential unit and calendar year!

That means, if you only have one heating unit (single-family house) and only submit applications in one calendar year, you will receive a maximum of €24k funding (heating has the highest funding, but be careful here too, you won’t reach the 40% with all models).

The cost estimates seem relatively realistic to me (roof depends on how big it is and whether moisture has already caused damage to the roof structure), I would see the heating as more expensive (underfloor heating usually means raising the floor structure, so no further use of existing doors and frames, etc...), but I think you probably don’t need controlled ventilation?

What strikes me, however, is that you now want to insulate the basement ceiling. If the basement is damp-damp and with 130 sqm of living space, I would tend to seal and insulate it from the outside. Not an option? Of course, that will be more expensive, then you won’t get far with the €50k for exterior insulation.

What else do you want to do with the remaining €100,000?

It is supposed to become 2 residential units. However, nothing will be rented out. But it should be built/converted in such a way that the house can be separated.
That is how the energy consultant calculated it so that we get the funding for 2 residential units.

I also think the cost estimate is realistic.

The basement is damp. The architect/structural engineer says that such a problem cannot be brought under control. Sealing the exterior wall does not bring the desired effect according to his statement. The moisture also penetrates the basement through the foundation.
According to the architect, a specialist company would have to be commissioned to fully seal the basement and carry out drilling in the foundation. The whole thing would cost well over €50,000.

The remaining €100,000 is for electricity, floors, water, sewage, new kitchen, etc. Whether that will be enough, I don’t know either.