Secure affordable construction interest rates? What should we do?

Hello

we have the following problem and cannot come to a "reasonable" solution :)

My annual gross income from self-employment is about 120,000 EUR, low income from my wife not considered. Per month, after deducting all costs, about 4000 EUR net remains (without my wife's earnings), which we are currently saving diligently. Since unfortunately we have only been saving for about a year, only around 40,000 EUR have accumulated so far. However, my average income over the last 10 years is only about 40,000 EUR gross per year. It tends to remain six-figure in the future though.

Our goal so far has been: save up to 200,000 EUR in order to then buy a plot of land and build. For this, we estimate about 150,000 EUR for the land + about 350,000 EUR for a house with a basement. I want to save up the relatively high equity because of my self-employment and the associated risk.

Now the construction loan interest rates are incredibly low and the land prices in our desired area are skyrocketing :) One of the last plots with a good location should cost about 230,000 EUR (1000 sqm), somewhat rural and 30 min from the city, but there are also affordable plots from 50 EUR per sqm. 230,000 EUR just for the land is actually too expensive for us at the moment.

We don't want to build right now due to the low equity. In 3..4 years with significantly more equity, the price might be okay, but then the above-mentioned plot will surely be long gone :(

So what to do? And how to secure the low construction loan interest rates? Building savings is not an option. I have already calculated extensively that it is not worthwhile. Buying the above-mentioned plot and fully financing it for 10 years? But a) the interest rate is not as good and b) that would be dead capital in the coming 4 "saving years."

What options remain?

- keep saving and ignore the low interest rates, as well as take on inflation risk and pay even higher prices for land in a few years OR build rurally..

- buy a plot now... an expensive one with a good location? a cheap one in the village and pay it off fully in 3..4 years?

- or follow the motto "No Risk..No Fun" and buy & build NOW and start directly within the next 1..2 years with little equity..

Maybe someone has some suggestions for me :)

Best regards, Steffen

Is there even a way to secure the interest rates if you do nothing now? I think the safest way is the last solution you suggested. Why take risks? If you are sure you will continue to earn that much, it should work out. If you are self-employed, the question is how the interest rates look for you? I would inquire at the bank about the conditions for a loan and then decide; it probably won't get any cheaper.

No, I am not sure. Economic changes or illness can quickly become a big problem. With a loan of 100 or 150 THOUSAND EUR, the risk would be manageable, and I probably wouldn't be worried about it. But > 300 THOUSAND EUR is actually too risky for us. Regarding the interest rates: That mainly depends on the equity... my main bank currently offers 300 THOUSAND EUR with 200 THOUSAND EUR equity at an effective annual interest rate of 2.8% with a 10-year term.

Regards, Steffen