Land purchase and house construction too risky in the current situation?

And don't be too afraid of parental leave. It usually lasts only 12 months with reduced income. Then 1600€ per month are missing, but calculated for the one year, that's still "only" 20,000€ - just save that up beforehand.

And don't be too afraid of parental leave. It's usually only 12 months with reduced income. Then you miss 1600€ per month, but calculated over one year, it's "only" 20,000€ – just save that beforehand.

Don't forget the tax backpayment ;)

And don’t be too afraid of parental leave. Usually, it’s only 12 months with reduced income.

I find that too optimistic because that only works if you return to full-time work immediately afterwards. That not only assumes that you want to leave your child in care for 8-9 hours at just one year old but also that you get the appropriate care and that it actually works. For us, that is currently a problem; last week it got worse every day until Friday when I took the little one back with me directly. The childminder is now fundamentally questioning this as well, and as it looks, we will somehow bridge the time until the summer holidays and then look for other care. I’m glad that we don’t both work 100%.

All well and good with parental leave etc. Now we first need reliable figures for house+basement+additional construction costs. (Rest is fine so far…)

Hello everyone,

thank you for the numerous responses. We were away over the weekend, so I couldn’t respond to all of them, but I wanted to give an update after the appointment with the construction company.

Today we had a very detailed conversation and received a rough cost estimate for our idea.
For 150m² of living space on 2 full floors with an attic, we would pay about €450,000 turnkey; the photovoltaic system and garage would have to be paid separately and probably postponed by a few years. The construction company sees a potential savings of about €20,000 through our own work, but the recommendation was rather not to plan for this, because special requests for the fittings usually offset this saving.
A basement would cost us about €80,000 (which matches well with the cost estimate we have received here) and would therefore not be affordable for us.

In total, we would be at about €730,000 for the plot (€260,000), ancillary purchase costs (€20,000), and turnkey construction costs (€450,000), and would still have about €70,000 buffer for outdoor facilities, driveway/parking space, furnishings, and incidental costs such as construction electricity, building permit, etc.

So if we forgo the basement and postpone the photovoltaic system and garage for a few years, the project should be feasible for us.

Now we just have to decide for ourselves whether we
a) are willing to make these sacrifices even though we would commit ourselves to a rate of about €2,500 for the next 30-35 years (which, as some have also written here, basically forces us to go back to full-time work immediately after parental leave and place the children in childcare) and
b) want to take the risk that interest rates might rise significantly again by the time the loan agreement is finalized (which will still take a while, since the construction planning also needs to be carefully considered) and that we would then have to finance over an even longer term.

Best regards,
Julia

are willing to make these compromises

These are not serious compromises. You don’t live in the basement and the car doesn’t care whether it is safely parked in the garage (if there is even space there) or outside.

are willing to take the risk that the interest rates might increase significantly again until the credit agreement is finalized (which will take some time, since the construction planning also needs to be carefully considered) and that we would then have to finance over an even longer term.

I have only just been able to read the thread, but at your age I would look for a bank that allows adjusting the repayment rate to 1%. You are still so young that you can, for example, start with 3-4% repayment (there are often better conditions) and then immediately change to 1%. Mathematically a very long term, but so what. Then, at 65, you will have a very small outstanding debt left. Better than having to pay a high rent in old age – in the medium term you will have to accept a (significantly) higher rent anyway if the current house is too small for you.

And lastly: You can still pull the ripcord at any time. By the way, interest rates have moved down again by about 0.25% in the last few days.