Single-family house 1,000,000 affordability - monthly installment?

Hello forum members,

My wife and I are currently facing the question of the right financing for our construction project (single-family house, 230 sqm + basement).

General information about us:

[*]How old are you? 32 and 30
[*]Are there children? Yes, child 2 years old and soon child 0 years old
[*]What do you do professionally? Lawyer and employee at a Dax30 company
[*]How many hours do you work? Full-time and parental leave (part-time again in a few years)

Income and asset situation:

[*]What income do you have (gross/net)?
Me: approx. 7,000 net
Wife: 1,800 parental allowance, a bit more again with part-time
[*]How much child benefit do you receive?
219 € currently
[*]How much equity do you have?
Anytime available equity approx. 650,000 + plot on which the house is to be built. Capital that can hardly be withdrawn from some projects should remain untouched.
[*]How much equity do you want to invest in the house project?
We would like to fully finance the house construction with external funds. This is due to the low interest rates (according to initial offers between 0.4 and 0.7% interest). The tied equity generates higher returns, which in turn should be reinvested.

Monthly expenses:
Since I have been meticulously recording our expenses for years, I can quantify the monthly expenses at an average of EUR 4,000.
This includes the entire living costs from cars to vacations, food, leisure activities, etc. We do not have to make real sacrifices on "normal" things.
However, we are also not the type of people who need Rolex watches and drive Porsches. You should always keep your feet firmly on the ground.

Actual question:
We would like to fully finance the house for EUR 1,000,000 excluding outdoor facilities. However, the equity behind it should only serve as risk coverage.
From your point of view, is it okay to manage this amount with our income monthly? Or do you think that this would lead to us having to tap our equity at some point in order not to get into trouble at the end of the month?
I know the situation may appear quite comfortable and the basic feasibility is given. Nevertheless, we would like to cover the costs of the house plus ongoing additional costs from the monthly salary.

I look forward to critical and insightful comments. Thank you very much!

Best regards

Equity in the form of the property is available. Otherwise, there is only one thing to say: off to the bank and let's start building. Critical remarks? About what? There is nothing to note. Unless your living expenses are €6,000 per month, then the installment wouldn’t work ;-)

Eieieieieiei and ouch ouch ouch ouch... very tight panties ;)

Ok, now seriously, what do you want to hear? :-D Go for it!

Never questioned the total costs (buffer, really everything considered).

1,000,000 at 0.4%-0.7% and e.g. 3% repayment gives 35,000 p.a. meaning about 3,000 p.m.

According to your household calculation, that's easily doable.
And equity in the background... If you don't do that or can't do it, I don't know either.

Whether with or without equity - the use is a matter of personal taste/risk tolerance.

Shaking my head.. sometimes I doubt the thread creators whether they really exist.

Hello both,

thank you very much in advance! The sheer amount of the construction costs really shocked me. Somehow, I'm still used to the amount I lived on during my studies. Therefore, I don't want to spend an excessive amount of money on a house where I can only live. However, as calculated by you, the problem arises that if the current living expenses remain the same and the financing comes on top, there won't be much room left for other savings, for example to send children to university (that’s still a few years away and if at all...).

In particular, I also wonder whether the total volume [Haus+Grundstück] corresponds to the actual value. But that is another question.

Best regards

Head shaking.. sometimes I doubt whether the thread creators really exist.

Why? The amount is not real. The handling of these amounts has not been practiced for very long. In this respect, the exchange also helps psychologically.