Is the funding framework realistic and reasonable?

Hello everyone,
at the beginning I would like to explain our current framework situation so that you can also evaluate it.
We have the desire to move into our own home as quickly as possible due to exorbitant rent.

General:
- Us: 33M & 29F
- 2 children in the next 5 years
- Income
F: 3150 net (full-time civil servant / private health insurance already deducted, salary increases annually by approx. 50 €, allowances per child 50 €)
M: 3100 net (permanent full-time, IT manager, salary expected to continue to grow)
Annual bonuses: 5000 €

Total: 6250 € net monthly.

The plan is that during parental leave, one parent will stay at home receiving 900 € parental allowance. By adjusting the tax class + child benefits, we come to an income of approx. 4500 net monthly in this case.

Monthly expense situation:
- Rent: 950 €
- Additional costs 200 €
- Electricity, phone, GEZ: 100 €
- Insurances 2x car, 1x life: 145 €
- Club fees: 185 €
- Fuel: 250 €
- Food: 600 €

Total: 2430 €

Therefore, there is a theoretical monthly surplus of 3820 € (2070 € during parental leave).

Equity:
Due to the wedding + extensive travels, we have so far only saved approx. 50,000 € in equity. Our income has only existed for about 2 years, since she was a student before that.

Building project:
Plot: A size of about 350 m² would be sufficient for us; planned budget for this position is 200,000 - 250,000 €.

House construction: We have offers from various construction companies. We want to build a single-family house with approx. 160-170 m² including a full basement. The price range of the offers is around 400,000 € including ancillary building costs.

This results in a capital requirement of 650,000 €. Assuming I finance this fully, this would mean an interest rate of 2.1 % + repayment 2 % over a term of 20 years with a monthly burden of 2235 €.

Accordingly, the monthly expenses would increase by 1500 €.
This would mean disposable capital per month of 2460 € or 494 € during parental leave. (Possibly reduced repayment during parental leave)

Now to the actual question to you:
Do you see this project as realistic? I am currently having a hard time gauging the limit of what burden is reasonably possible and would appreciate your feedback.

Many greetings,
Dennis

Basically, it doesn't look too bad at first.
I like the 'theoretical' monthly surplus.
The fact that it doesn't correspond to reality is shown by the existing equity. If that was saved exclusively in the last two years, the practical surplus is a bit over 2k, which is still very decent.

Nevertheless, the basics for the calculation should be realistic.
In my experience, lifestyle doesn't turn around 180° just because you become a property owner.
In the situation of parental leave, the rate is simply too high if you calculate with realistic expenses.
Children are not free either, especially at the beginning there are some expensive purchases to be made.
Your advantage, of course, is that there are no children at the moment, so you can count on the full salaries with the bank.

With many providers, the repayment rate can be changed during the term. You might then have to go down to 1% for the few years with small children. Many people would now scream NOOO, too little, but for a foreseeable period that would be justifiable.

Otherwise, the question of the suitable plot remains. A detached house with 160-170m² living space does not fit on a 350m² plot. A semi-detached house might work. The 400k all-in is also too little, add about 50k to that.
Summary: Good income, equity too low, expectations too generous. These are the variables that need to be adjusted until the dream becomes reality.

4500 net with children, 2230€ annuity plus at least 300€ ancillary costs plus provisions. That means if there are children, more than 50% goes towards the loan. By the way, 2% repayment and 20 years fixed is not a full repayment. That means residual special repayment. Where should that come from with 2 children? Food, care, vacation, new car - everything has to be financed. I think your plan is okay as it stands now, with children you have to look each other in the eyes and ask if it is realistic. I say no.

No, it is not realistic at all. The net amount is good, the equity is clearly too low.

The plot is planned to be very expensive. It's in NW, right? Why should it be so expensive there?

You will never build the house with ancillary costs for 400,000 euros either. At least 100,000 euros are missing, more like 150,000 euros (garden, kitchen, fittings, buffer).

I would say you need about 200,000 euros more equity. So either save more or cut back.

On the one hand, I see it similarly to Bookstar, on the other hand, it would be sad if one couldn't afford a house with such good salaries.

I can't really say much about the numbers themselves.
Equity is really just too little.

We set the installment so that it corresponds to one third of a salary, in case someone is absent due to a longer illness or children.
Spending a maximum of one third of the salary on housing/rent is something I have always heard/read as a reasonable value.

On the one hand, I see it similarly to Bookstar, on the other hand, it would be sad if with such good salaries one couldn’t afford a house.

I can’t really say much about the numbers themselves.
Equity is really just too little.

We have set the rate so that it corresponds to one third of a salary, in case someone is out for a longer illness or due to children.
Spending a maximum of one third of the salary on housing/rent is something I have always heard/read as a reasonable value anyway.

It is possible. But definitely not a plot of land for 250k plus house 400k (which is not enough for the size).