Realistic assessment for home construction financing, please

Hello,

I would like your assessment of whether this would be doable for building a house.

I currently earn 2100 euros net + child benefit (1 child). My wife is currently a housewife without income. In the near future, a second child is planned, so my wife could work part-time again at most (about 500 euros net additionally). So we currently have about 700 euros per month as a rate for our house. (later possibly 1300 euros)

We own a plot of land worth about 75,000 euros and about 20,000 euros in equity. We would like to build a house for about 150,000 - 200,000 euros (max. 200,000 for the fully completed house) and do as much as possible ourselves. A friend of mine has a construction company, so we would get the machines cheaper. The house should be a Kfw40 or Kfw55 with about 140 - 160 sqm of living space on 1.2 floors and possibly a double garage as storage space. Ground-source heat pump and underfloor heating as well as photovoltaics are planned.
Is this project feasible? What do you think?

Best regards Hawk-14

With the desired square meter number, you’re already not going to make it with 150-200,000 € (my subjective assessment). KFW40 is also not easy. Double garage on top of that, no way. Photovoltaics and heat pump? Phew .... and that with an (initial) rate of 700 € / month? I can’t judge your living conditions, but based on the given data, I’m quite sure that it’s not feasible and will definitely go wrong.

No. First, your income is too low to build, and second, your construction project will surely exceed the 250,000€ mark.

On the one hand, you get a small modest house for 200000, possibly [Kfw70] with a carport, on the other hand, you pay around 800 per month for 200000

Forget it, sell the property and find yourself a nice 5-room apartment.

In my opinion, you will not be doing yourself any favors with the project. A lot has already been said about the construction costs. Unfortunately, there is a world of difference between your wishes and your budget. No amount of personal work can change that. But above all, you are not doing yourself any favors with the financing. Let me give you a simple example calculation. You say you need 200 TEUR and want to pay 700 EUR monthly. With a 15-year fixed interest period and an interest rate somewhere between 3 and 3.5% (I'll take 3.25%), you can only repay 1%. And with the current interest rates, 2% is the absolute minimum! Loan 200 TEUR, interest rate 3.25%, repayment 1% = monthly rate approx. 700 EUR. Remaining debt after 15 years is still approx. 161 TEUR. That means you have only repaid just under 39 TEUR but have already paid 89 TEUR in interest by then! You could pay rent for a long time for that! The interest rate change risk is even higher; if in 15 years interest rates are higher (since we are currently in an absolute low-interest phase, this is very likely), your rate will skyrocket. If we calculate with 5% in 15 years, you would then have to pay a monthly rate of 800 EUR and your house would be paid off after 51 (!!) years...