Land value too low - therefore no approval for construction financing

Let's see.... it is very rare that banks also recognize the credit balance account and consider it as equity or collateral. It doesn't mean that we generally do not want to provide equity. However, waiving the special interest rate also means losing real money for 7 years. On the other hand, 100% financing is quite expensive (in terms of interest). Let's see how we decide. Everything is still open. Otherwise, as I have already said, then in 7 years.

Case 1: You finance 250k euros at hypothetical interest rates of 2.8% (100% financing) => 7000 euros interest per year.

Case 2: You finance 210k euros with 0.5% lower interest rates (due to equity, no financing of incidental costs, approximately the current difference of the Ing-Diba between 0% equity and 90% equity) => 4820 euros interest per year.

Difference: about 2200 euros in financing costs saved per year, which corresponds to a return of 5.5% per year on your 40,000 euros. So effectively you only lose the difference between your return and these 5.5% (after taxes!). If your investment yields less than 5.5% after taxes or less than 7.3% before withholding tax, you even make a loss.

Thank you for the clear example calculation. We receive a special interest rate of 10% for each year saved in addition to the normal interest rate. It is a savings account that banks no longer offer. That is why we are hesitant. This runs out in 7 years. Compared to today, you get at most 1% interest on the balance, and if you also deduct the taxation, is it still worth saving at all? Therefore, we are cautious with the financing option linked to building savings contracts.

Make up your mind about what you want. From a purely economic point of view, it is certainly better (if the conditions are as you stated) to leave the money where it is and only buy / build in 7 years... The economic perspective is just not the only one. Opposed to that is the quality of life. We have a - not identical - but at least comparable situation.

What use is a house in 7 years if my children are already significantly older then? The garden is especially great in the early years. What use is a house in 7 years if I have to live in a smaller, significantly less nice apartment until then? What use is a house in 7 years if I constantly have in the back of my mind that a house would be so much nicer? What use is a house in 7 years if....

You just miss out on quality of life. Whether this quality of life is worth less money to you is something everyone has to decide for themselves. But what would you do with the money later? Usually, it flows into things that in turn increase the quality of life...

Either you can and want to afford it, or not. We have made our decision

Unfortunately, quality of life depends on money. That is of course a pity. But honestly, you can’t think that far. So many things can happen.... But for me, it would be nice if my children could run wild in the garden. Let them run naked too, not have to care about the neighbors, not have to cross the street, and be able to play without any cigarette butts, glass shards, trash in the sandbox, etc. lying around. That’s how playgrounds are nowadays. Or has anyone experienced clean public playgrounds? It sounds a bit exaggerated, and that’s why having a private garden (even just a lawn) would be nice. And actually, I have everything I need: family, job, and an apartment (but the rents are rising).

I am only now reading through the thread a little and wondering how the main topic relates to the content.

What do construction costs have to do with the standard land value and why is it too low?

If there is something that does not lead to discussions in the mortgage lending value ordinance, it is the land value of the property that is the best ascertainable value. And in that case, it is a case of robbing Peter to pay Paul, unless you have a purchase price far beyond the standard land value.