Low interest rates vs. equity, bank recommendation

Hello everyone,

my boyfriend and I want to build a house.
At the moment, we could contribute about €30,000 of equity. Actually, we wanted to build only in 3-4 years, when we have saved about €100,000 in equity.
But since the interest rates are currently so low and we could also save rent (monthly €760 cold), we have thought about building already next year, provided we find a plot of land (about €100,000) and a prefab house provider (about €300,000). Of course, we also still need to get a loan - do you have any bank recommendations? We both earn +/- €2,400 net and want to build in the greater Stuttgart area TÜ/BB/CW/PF/RT.

Or should we better keep saving? Do you believe the interest rates will remain this low?

Thank you very much for your answers.

Hello lucky one,

The interest rates really can't go much lower, although people said that 1 or 2 years ago as well and they still fell. Whether they will rise soon, I would like to know that too, but unfortunately my crystal ball is broken.

Otherwise, the equity capital is of course not impressive. Here it somewhat depends on what the land will cost, since the ancillary costs and also some construction-related additional costs should be covered with equity capital. But building won't happen in less than half a year to a year anyway. So if you could really save €70,000 in 3-4 years, then you will also get together another €10-20k by the start of construction. What you yourself have to consider is whether you can bridge times without 2 full salaries (e.g. parental leave, unemployment benefits, part-time).

Regarding the banks, I can only recommend asking not only your main bank and other banks but also credit brokers.

Best regards Musketier

30k quickly disappear for additional costs and new furniture, kitchen, etc... in the end, this will almost be a 100% financing. First, you have to get the 400k financed, and then the whole thing will probably settle around 3.8-4% interest with a 20-year fixed rate... with 2% repayment, you’re immediately in the region of ~2000€ monthly payment...

That might still work with a 4.8k€ income, but if one of the two earners fails (are children planned?), the whole financing collapses because with one income, this can’t even be remotely managed...

On the other hand, I would also build sooner rather than later under the current conditions... The solution is simply not to spend 400k! :)

As I read in the other thread, you want about 120m² without a basement... you definitely don’t need 300k for that... depending on what the land costs you (is there also saving potential here? maybe a semi-detached house?), you might already get by with significantly less... 350k sounds much more realistic in terms of financing, for example.