New construction financing single-family house 150 - 160 sqm

Hello house building forum, we have bought a plot of land and are currently calculating to what extent we can implement a construction project. We would greatly appreciate assessments and tips! General information about you:

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Who are you? two adults [*]How old are you? 28 (m) and 26 (f) [*]Are there children? no [*]Are children planned? yes, 2 pcs in the next 3-4 years [*]What do you do professionally? both employed (industry + public service) [*]How many hours do you work? currently both full-time. When the children are here, it is planned that my partner reduces to part-time
Income and asset situation:
[*]What income do you have (gross/net)? currently net together is just under €5,000. When my partner reduces to part-time and the children are here it will probably be between €4,700 and €5,000. (Marriage coming soon) [*]How much equity do you have? €110,000 [*]How much equity do you want to put into the house project? €90-100k (would keep at least €10k buffer)
Expense situation: Housing costs:
[*]current "rent": €500 (a house belongs to me and my siblings, therefore low rent)
Mobility costs:
[*]Car 1: €220 / month [*]Car 2: €160 / month
Insurance costs:
[*]all current insurances combined (car, occupational disability, liability.....) approx. €250 / month
Living expenses:
[*]estimated with 2 children: approx. €1,700 / month for food, clothes, eating out
Total income and expenses:
[*]Total income: approx. €5,000 [*]Total expenses: currently approx. €2,600 [*]Balance +€2,400 / month
Total income and expenses after parental leave and after my partner switches to part-time:
[*]Total income: approx. €4,700 - €5,000 (depending on salary development) [*]Expenses with two children then total: approx. €3,200 [*]Balance: +€1,500 - 1,800 [LIST] [*]From this, the loan and all other costs for the house have to be paid

General information about the property:

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How big is the plot? 400 m² [*]What are its dimensions? approx. 17x23 meters [*]What is the standard land value? approx. €140 / sqm [*]New build, old building (year built), house type? new build [*]Garages? not decided yet, if possible a 6x9m precast concrete garage [*]How big is the house? (living space / usable space): external dimensions will be between min. 10.0m x10.0 m and max. 10.5m x10.5m. two full floors, no basement. [*]What is the market value of the land and house after completion? I don’t know exactly. In the long term, I see population growth in this small town and also the rail connection will be reactivated in about 3-4 years. I estimate the market value at the total costs of approx. €500k.
Construction or purchase costs:
[*]Land costs including development and acquisition ancillary costs: €65,000 [*]Construction or purchase costs (incl. architect, structural engineer): !Estimate! €2,500 / sqm living space (approx. 140 sqm LS planned) --> approx. €350k (We don’t know the exact total yet!) [*]Additional construction costs (e.g., house connections, soil expert, construction electricity, etc.): estimate €30,000 [*]Outdoor facilities/terrace, paths, garden design, fences, etc... estimate €50,000 including garage, terrace, fences, etc. [*]Total costs approx. €500,000
Other costs:
[*]Furniture, lamps, decoration: we will mainly plan a new dining table with chairs, otherwise we hardly need furniture. We would pay this from ongoing salary and not finance it.
Cost summary:
[*]Total costs: approx. €500,000 [*]Deductible equity: €100,000 [*]Financing amount: approx. €400,000
Necessary loan details:
[*]If I calculate everything, a loan of €400,000 is really the upper limit for us. I already feel uneasy and I definitely don't want to go beyond that [*]We have already received a first offer: [LIST] [*]Bank 1: €280k / 20 years fixed interest / 1.16% effective interest / 2% repayment planned + 5% special repayment option [*]KfW 153: €120k / 10 years fixed interest / 1.13% effective interest / 3% repayment planned

Questions:

[*]Are the assumed costs of €2,500 / sqm living space realistic? (Northern Bavaria, near Nuremberg, not a metropolitan region) [*]How do you assess the affordability of the loan with the income situation? [*]What do you say about the bank’s financing offer?

Thanks in advance for your opinions

If the first child comes in 4 years, maybe the second child will come in 7 years? Then there are still 3 years left until the "10 years KfW loan term" ends. That already reduces a substantial monthly amount - in other words: the repayment sum decreases automatically. Here, you definitely need to check whether you can possibly pay off the loan completely via special repayment or similar?

Since we are aiming for a similar financing, may I ask who Bank 1 is? The conditions are really great. We have not had under 1.2% with similar values yet.

Unfortunately, that is artificially calculated, because after the 10-year fixed interest period, the KfW loan is not fully paid off, but of the €120,000 there is still a remaining debt of well over €80,000, which of course still needs to be financed...

Of course, you can make special repayments, but that cannot be assumed (the OP has not mentioned anything) and €80,000 is not peanuts...

We also completed a similar financing at about your age.
Currently, there are two of us working with a combined net income of 5.5k. As long as this is the case, 2% is amortized and 1% of the amortization is invested in ETFs over 20 years.
As soon as parental leave starts, we'll just reduce one thing or another for a few years, which should absolutely be no problem. Another important factor here is that our loan is flexible (amortization can be changed between 1 and 10%). Since we still have just under 37 years until retirement, I don't see any problems there. Added to this is inflation (debts become less valuable) and salary increases (due to inflation and, among other things, because I am a career starter).

Buy and don't overthink it so much. I even think it's good to buy before the children arrive. Then you can set it up nicely once (where the money is available) and have peace for several years afterward.

What happens to the remaining amount then?
Does it have to be taken over by a "regular" bank or can it be extended with the KfW?

Prepayments are already planned, but I currently find it difficult to estimate how much will be possible

What fixed interest period did you have?
I'm just considering it, because with a 20-year term and 2% repayment a considerable sum still remains. Maybe better to go for 25 or 30 right away