Realistic loan amount?

Hello everyone,

the dream of our own little house is getting closer for us as well. Now the question arises for us too, what is feasible?

Brief info about us:

- She 30, employee in the automotive industry
- He 29, employee at a large German railway company.
- No children / [are planned] / max. 1-2 years parental leave for the woman.
- Parents live nearby, so they could spontaneously step in in case of children's illness, etc.
- total monthly net income 4,800 € (without bonus, vacation and Christmas pay)
- building project in the Rhein Main area

About our project:

- detached single-family house with at least 150 m² with basement
- plot approx. 400-500 m²
- house construction by a developer

Financial situation:

- cash: 75,000 €
- savings contract 50,000 € (deposited 23,000 €) credit interest: 0.5% / debit interest: 2.95%
- savings contract 25,000 € (deposited 5,200 €) credit interest: 2.0% / debit interest: 3.75%
- current rent 650 € all-inclusive
- current monthly savings rate 1,700 €

We plan a monthly repayment of about 1,600 €. Everything else goes into annual special repayments.

What loan amount would realistically be manageable?
Is the monthly rate chosen too high or too low?

Thank you very much for your opinions!!!

Best regards, Fex

With the installment, you could currently comfortably finance EUR 350. How does it look with parental leave?

During parental leave, we might possibly forgo the special repayments or reduce the monthly installments a bit.

It depends on the price of the plot whether that (depending on extras for the house) is enough for everything in that size. The mentioned €350,000 is good for a relaxed repayment of €1,600 p.a. The question is whether €425,000 (excluding the building savings contract) is enough for everything. We are also building in the RM area, 160 sqm (2 full floors), no basement, a garage, and including incidental costs (excluding exterior landscaping) we come to a good €380,000. The plot has not yet been purchased, heated with gas, and has no ventilation system. All in all, with a 600 sqm plot, we are at just under €545,000. Whether it is enough we do not know as of today, because we will only start building in 2 months and are still in the tendering phase. We do not have a simple floor plan, but no heavy technology either. But I don't want to scare you. It works - also in the RM area - certainly somewhat cheaper. :)

Even with us, the dream of owning our own house is getting closer.
Now the question also arises for us: what is feasible?

Brief info about us:
- She, 30, employee in the automotive industry
- He, 29, employee at a large German railway company
- No children / planned / max. 1-2 years parental leave for the woman
- Parents live nearby, so they could spontaneously step in in case of children's illness, etc.
- monthly net income total €4,800 (without bonus, holiday and Christmas pay)
- construction project in the Rhine-Main area

About our project:
- detached single-family house with at least 150 m² with basement
- plot approx. 400-500 m²
- house construction by a developer

Financial situation:
- cash: €75,000
- building savings contract €50,000 (paid in €23,000) credit interest: 0.5% / debit interest: 2.95%
- building savings contract €25,000 (paid in €5,200) credit interest: 2.0% / debit interest: 3.75%
- current rent €650 warm
- current monthly savings rate €1,700

Planning with a monthly repayment of approx. €1,600. Everything else goes into annual special repayments.

What loan amount would be realistically manageable?
Is the monthly rate chosen too high or too low?

Regards, Fex

Hi Fex,

I also see your situation as relatively relaxed – although I cannot really estimate the land and building costs for you.

Even if your cold rent were only €450, you would still have a buffer of €550 – so the "dry spell parental leave" would already be well covered (apart from bonus, holiday and Christmas pay). How is the €4,800 net split between you (she/he)?

Although I am not a fan of repayment replacement via building savings contracts, in your case I would include the €50,000 building savings contract in the plan. This contract should be close to allocation. The loan interest rate is on a comparable level to long-term financing; you can activate €25,000 additional equity and possibly pay off the first part of your loan relatively quickly.
I would keep the second building savings contract in reserve and save only minimally for now. You get a comparatively good credit interest here and still need a "repair reserve" in the future. If the need arises, the 3.75% loan interest could then become attractive again. You can then use this building savings contract as the aforesaid repair reserve after moving in.

Have you already found a suitable plot and a potential building partner?
Purpose of the question: as long as nothing is fixed, you can keep saving and increase your equity (first fully use the savings amount of the building savings contract so that it is allocated as soon as possible).
In our case, more than one year elapsed between the initial talks with the construction companies and the start of construction. But it does not necessarily have to take that long.