Realistic assessment for home construction financing, please

In my opinion, you won't be doing yourself any favors with this project. A lot has already been said about the construction costs. Unfortunately, there is a huge gap between your wishes and your budget. Own contributions won't be able to bridge that gap either. But especially with the financing, you are not doing yourself any favors. I'll give you a simple example calculation. You say you need 200,000 EUR 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 assume 3.25%), you can only amortize 1%. And with current interest rates, 2% is the absolute minimum! Loan 200,000 EUR, interest rate 3.25%, amortization 1% = monthly payment approx. 700 EUR Remaining debt after 15 years is still about 161,000 EUR. That means you have only paid off just under 39,000 EUR but have already paid 89,000 EUR in interest by then! You could pay rent for a long time with that! Even greater is the interest rate risk: if interest rates are higher in 15 years (since we currently have an absolute low-interest phase, this is very likely), your rate will skyrocket. If we assume 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 ..

The number fails much earlier. If I calculate with 700 EUR ANNUITY (!) at a net income of 2100 EUR and completely disregard the modest rest... it will go wrong. Already before the end of the fixed interest period.

As a rule of thumb, at least 6% per annum (amortization plus interest) should not exceed 30% of net income. Then you still have to calculate the "rest," sewage, precipitation, property tax, garbage collection, insurance, etc.

You can easily calculate around 2 EUR per sqm for that.

Last but not least, reserves for maintenance must be built up; as an owner, you don't just call your landlord when the heating is broken.

Even if a certain amount of equity is available due to the plot... a construction cost of 200 or 250 thousand EUR can hardly be managed solidly.

I am financing 340,000 EUR with a net income of 4600 EUR (without counting Christmas bonus, bonuses or anything else) and see myself, with regard to family planning, as borderline.

If a child arrives, about 1200 EUR are lost... in the best case, after a year I have a part-time wife with 600 EUR in the calculation, in reality rather not.

Sure, a lot is possible, the question is always at what price? A house must not become a prison. Life around it must also be affordable! Occasionally going to the cinema, offering something to the children, the car breaks down, the washing machine breaks down, electricity gets expensive, etc.