Massive house costs KFW 70 - Prefabricated house

Financing Besides the existing plot of land and the Herbst family's own funds (€20,000), all eligible KfW funding programs are combined to finance the project. The basis for determining the total costs in the KfW Home Ownership Program is the value of the land amounting to €100,000 plus the estimated construction costs of €200,000 minus the proportional construction costs of €70,000 for the granny flat, which is not eligible for funding under the KfW Home Ownership Program. Due to the building's special energy-saving construction style (KfW Efficiency House 70), the "Energy Efficient Construction (Program 153)" can be used to finance the construction costs of both apartments. The remaining amount is financed through an additional bank loan.

Do your partner a favor and let her read this here.

We will soon have 4100 Eur per month....

The following home loans we will receive:
2x50,000 Eur KFW 70 / 10 years fixed interest period
70,000 Eur annuity loan for the granny flat / 30 years fixed interest period
190,000 Eur annuity loan / 30 years fixed interest period

= 1500 Eur per month
+ 100 Eur payment from parents (not during parental leave)
- 300 Eur rental income

= 1200-1300 Eur / monthly

I wish you much success with your project. This will be a very tight squeeze.

Especially in 10 years, when you have to refinance the KFW loans. Always remember that not too long ago, mortgage rates were between 5-8%. We are now at the bottom. It can't go much lower, since banks don’t pay out money for lending :D

Have someone calculate the situation in 10 years with 7%, and then decide.
Also remember that the money you are currently planning might not be enough. 360,000 including land purchase is not a lot. For us, the land alone is not enough anymore, now that we have more concrete prices. The construction has been calculated about 50,000 more expensive in the last 3 months than the initial offer. We actively adjusted some items, but much came unexpected.

The following home loans we have: 2x50,000 Eur KFW 70 / 10 years fixed interest rate 70,000 Eur annuity loan for the granny flat / 30 years fixed interest rate 190,000 Eur annuity loan / 30 years fixed interest rate

= 1500 Eur per month + 100 Eur payment from parents (not during parental leave) - 300 Eur rental income

= 1200-1300 Eur / monthly.

As Der Da already wrote: don't forget that the KFW interest rates will probably rise in 10 years and that you might not always have the granny flat rented... with bad luck, you could even get a problematic tenant and then you'll have real fun!

You should also not forget that your income will decrease accordingly with children (how is your 4100 made up? 3000 from you, the rest from her? or rather half and half?) and even after parental leave, very few can return to work 100%... or if they do, you have to pay for full-time childcare which can easily cost 400-500€ per month!

As a precaution, only count your girlfriend’s income at half to be on the safe side long term...

Furthermore, always remember that 30,000 extra can quickly become due... and if you then have to refinance these 30,000 at a high interest rate, it really hurts!

Ultimately, he has now received enough warnings to have to assess for himself whether he wants to take the risk.

It can go well, but it can just as easily go wrong. The most important thing is to always keep an eye on the financial matters and not be tempted by the dream of owning your own home. I also have to constantly hold myself back. Because the temptations to quickly spend another thousand are too great. You quickly do the math and say: it lasts for 20 years... it pays off over the years.

One thought you also have to give up, which we often did at the beginning, is: "We'll build later when we have money again." Unfortunately, this later would only be in 20 years :). Because you should go as quickly as possible to a 2% repayment or more. And then there really isn't anything left. And you must not forget to think about whether you want to restrict yourself so much for a house. When you finance at the limit, there is simply no family vacation.

We calculated everything so that we can still afford to fly to China for 2 weeks now and then. That always has to be possible because otherwise life is not worth living. And the illusion of wanting to build something for your children should also be discarded. Because life is becoming more and more global, and few want to move into an outdated parental home.

What I would be very interested in, however, is at what interest rate you get the fixed 30-year interest period. We already had difficulties getting a decent interest rate for 15 years, and for 20 years the bankers took flight. Our financial advisor finally made it possible to fix a 20-year loan at a 15-year interest rate. So €200,000 loan with 20 years of interest rate security at 3.3% effective.

Yes, we also calculated it that way, including child costs and that my girlfriend will only work part-time afterwards with a 2-year baby break during which we will then split the parental allowance over 2 years.......that's why we also think it will be enough.

this is not a final decision yet, but in the offer we would now:

260,000 Eur at 4.2% effective.
KFW 100,000 Eur at 2.68%

Or fully 360,000 Eur for 30 years at 4.02% effective

but maybe we will get a better offer.
I am also not sure about 30 years yet. 20 years would also be available for 3.75%. The question is what will be more worthwhile in the end. Probably something in the middle....
Which bank did you go through?