Planning for house construction in 5 years

Hello everyone,

I would now like to ask you for advice regarding a residential financing:

The following info in advance:
Married for 28 years, employee with permanent contract
My wife is 25 years old, employee with permanent contract
Children are also planned soon.

We currently live in an apartment owned by my parents-in-law, we pay the "maintenance costs" but otherwise can live rent-free as long as we want.

Now we are planning our house-building project, for which we already purchased a developed plot 3 years ago. The plot is 860 sqm and cost 60,000€. There is still a loan running for 5 more years which is repaid monthly with 600€.
The plan is a house with approximately 170 sqm living area + cellar + double garage.
For the house itself, an estimated cost of 250,000€ with a lot of personal contribution (15,000€?1?).
Additionally, incidental costs of 15,000€, buffer of 10,000€, kitchen 15,000€, as well as garden/paving 10,000€.
So a total sum of 300,000€.

Our financial situation currently looks as follows:
- Cash funds 10,000€, monthly savings of 300€.
- Loan -35,000€, monthly payment 600€.
- I have a Riester pension fund savings plan from 2006 with a balance of 13,000€. This capital is to be used for the financing as well.
- BSP contract for 50,000€, currently about 15,000€ saved, monthly 126€.

Additionally, there are 2 capital life insurances:
1. Maturity in 37 years, guaranteed 46,000€.
2. Maturity in 27 years, guaranteed 35,000€.

Here I would like to include at least 1 insurance in the financing.

Since we currently live rent-free, I have a great need for security, and the loan as well as the BSP still need about 5 years until allocation, we plan to build in about 5 years.

At the moment, we save a total of 1,000€ which we can continue to afford with children as well, when we want to build then we want to repay a maximum of 800€ monthly (200€ difference for reserves, repairs, etc.)

In 5 years it will look approximately as follows:

Plot paid off
Cash funds then about 20,000€
Riester savings plan approx. 20,000€
Bauspar balance 23,000€ (ready for allocation as 45% of 50,000€)

plus the two life insurances.

If possible, we would also like to finance with KFW or LABO.

What do you think about the key data? Could it work this way, and what investment tips do you have? I hope not, but I assume that interest rates will rise within 5 years.

So, if you have taken the trouble to read the latest posts in the subforum, you will realize that you cannot build a house of that size with 250000, let alone one with a basement and double garage. You have forgotten the additional construction costs, which can also be quickly found here in the forum. The next math whizzes here will probably add roughly 100000 on top, but let's wait and see. Your financing framework should be looked at by a financial expert, they always have a better overview when Riester, building savings, and life insurance are supposed to come into play together.

170 sqm with basement + double garage for 250,000 and that in 5 years. That will be a tough one. Then in your listing of other costs: additional costs are too low. They will surely be higher.

Unless, of course, in 5 years no one will build anymore, and the companies undercut each other to keep their order books full.

I also don't quite understand how you want to repay a 300,000 loan with 800 €. The interest rates won't fall that low. Equity will then presumably only be 20,000€.

So the additional costs probably had to be corrected upwards a bit (here in the forum, it is always mentioned to be between 30,000-40,000 €, there is a breakdown for that).
Double garage (finished) with foundation about 9,000-13,000 €.
A house with the basic data for 250,000 € will probably also be difficult (something is always possible ).
But with about 65,000 € equity plus life insurance (if it can be used), you can probably get good interest rates.
There is the 0.5%-financing through LABO (100,000 €) over 15 years, therefore a low rate. You could then manage the additional needed loan quite well with your remaining input.
However, 800 € total rate is quite low. It will take quite a while until everything is paid off.
Maybe a higher rate is possible (it should be), provided you both earn reasonably well and the children can already go to daycare or kindergarten...

By the way, 170m² is not exactly small. Especially if the basement is added.
Personally, I plan with 3 children and about 135-140m² when building a house (a good floor plan makes a big difference) plus usable basement (construction also in about 5 years --> plenty of time to plan and save).

Best regards

Zeiti

The next math wizards here will roughly guess 100,000 for you, but let's wait and see .

From what I've read so far, I would guess 110,000.

The Riester contract is to be canceled, if I understood correctly? Then it will be less than €13,000 that will come out if they are in there now.

€800 installments are not necessarily much, have you calculated how long it will take you to be debt-free?

Hello everyone,

thanks already for the answers. A few more points regarding the answers.

The 170m2 is a lot, I am aware of that; currently there is still a small extension (without upper floor) between the garage and the house with about 22m2 where maybe grandma is supposed to live, but that is not certain yet, so quickly there are only 148m2 of living space left, which is not that much.

The 250,000€ is my calculation for the total costs, with personal contribution already deducted.
Personal contribution means for me earthworks done myself, masonry (that also includes the cellar) done under supervision (3 masons in the family), otherwise except for the electrical installation and sheet metal work done myself. Am I still that far off? The floor plan is not yet detailed but is a rectangular, straightforward floor plan.

The Riester contract should not be cancelled but continued to be saved into, only I want to withdraw the accumulated credit then.

Regarding the incidental costs, I have budgeted 15,000€.
In my opinion, these include planning, house connection costs, building permit, surveying costs.
Development costs as well as property transfer tax are already paid since the plot of land already belongs to me.
Which extreme incidental costs have I forgotten now to get to 30 - 40k€?

Equity capital:
According to my calculation, the situation in 5 years looks as follows:

Equity capital:
Land value 60,000€
Cash approx. 20,000€
Riester savings plan approx. 20,000€
Building savings credit 23,000€ (ready for allocation as 45% of 50,000€)

Total 123,000€

Planned construction sum 300,000€ + 60,000€ land = 360,000€

Results in an equity ratio of 34%, plus in my opinion the high personal contributions as well as possibly the life insurance (I don’t know if that counts as equity capital)

Am I really that poorly positioned with this?

plus of course the two life insurances.