Single-family house: Is the rate realistic? How much house can we afford?

  • Erstellt am 2022-07-07 14:49:30

Construbo

2022-07-10 13:30:23
  • #1


I can only fully agree with that... the smaller the net income, the more one should orient oneself by this rule of thumb. I also do not always share the hypothesis that expenses increase disproportionately with higher income due to increased consumption. With a 3,000 installment and 7,000 available (with 10,000 net income), you can still live comfortably... an installment between 4,000-5,000 is also no problem income-wise in such a case – assuming a certain level of discipline…
 

WilderSueden

2022-07-10 14:51:40
  • #2
The rule is not completely wrong because the assumption of constant living costs is precisely the crux of the matter. Someone with €9000 net income will probably not drive a 10-year-old Asian car as a family car but rather a newer car from a so-called premium manufacturer. Vacations also tend to be significantly more expensive, and so on. Exceptions prove the rule.
 

Marvinius

2022-07-10 15:18:41
  • #3
I once lived in the USA for a year and had to pay 50% of my income for rent there. It was a financially very instructive experience. Since then, I have been paying very strict attention to the 1/3 rule. I would also highly recommend this to the aspiring builder, especially if children are planned. In addition, he drastically underestimates his mobility costs. €400 is just enough for a small car (Polo, Corsa), a family-suitable car can rather be estimated at €600 in a full calculation, and in rural areas two cars are often needed.
 

WilderSueden

2022-07-10 15:35:12
  • #4
What you say is correct (even if I find your car costs somewhat overestimated, 20,000 km at 30c would be 500€/month) and a proper assessment with a buffer definitely belongs to the financing. But: The problem with the one-third rule is that it is realistically not applicable, especially when including the additional costs. We definitely do not have poor builders here with just under 6000€ net, but with 2000€ for the installment, reserves, and additional costs, you definitely cannot build at current interest rates and prices. Renting an old building is also not better if the cold rent per square meter is significantly double-digit.
 

Marvinius

2022-07-10 15:48:15
  • #5
Yes, it is currently an unfavorable time to build. We first bought an old building and after it was paid off, built new. In both cases, the one-third rule regarding the bank installment worked out. Thanks to a salary increase for the wife, the current bank installment and additional costs are now under one-third of our net income. That is quite comfortable and also allows some leeway for the announced increases in energy costs.... Maybe you just have to face the fact that you currently have to reckon with a monthly installment of €3000 for a new build and should keep your hands off it if you have less than €9000 net per month.
 

Gerichtsdiener

2022-07-10 16:01:31
  • #6
First of all, thanks again for any input. I gratefully take all of that into my considerations.

Over the past two days, I took the trouble to create an overview of all expenses within a year. Not only for planning the financing, but because I always wanted to see where money quietly goes in everyday life. We were quite surprised by some items – e.g., Lieferando, expenses for gifts, etc. We also became aware again of how carefree we live (or can live), which in itself is a great privilege. We also found some saving potentials along the way, but that should remain irrelevant and unconsidered in this calculation for now. :)

In addition, to work with a buffer right away, I based the expenses on the last 13.5 months as "annual expenses" and rounded up almost all positions – which makes quite a difference with hundreds of individual items. Furthermore, I treated myself to an absolute luxury item last year for about €6,500, which is also included – in other words, nothing was sugar-coated, but rather calculated to our disadvantage. :)

After that, I compared the annual income (current and 2024) with the annual expenses and calculated the monthly "surplus" from that. Then I added the currently saved cold rent and subtracted mobility costs of €400. According to my calculation, that would be the absolute maximum possible rate.

Of course, one should deduct some amount from this despite the aforementioned buffer to avoid being overwhelmed by the smallest issue.

The conclusion: Even if we didn’t live one bit differently than we do now, we could already afford a maximum rate of €2,200. In 2024, even €2,500.

Since we have now also found saving potentials that we are partly tackling immediately, the calculation for 2024 without really painful
restrictions and only temporary renunciation of the above-mentioned unnecessary luxury items would even allow a maximum rate of €3,200.

So, I see that in 2024 we can afford between €2,300 and €3,200. Simply because we are very cautious people, I would go with the lowest value.
Nevertheless, I feel pretty confirmed with the €2,500, and honestly, that gives me a very good feeling. Before an actual financing, I would update the numbers again to be absolutely sure.

On the subject of mobility:
We could take over a car from the family. That means mobility costs do not have to include purchase costs, leasing rates, or anything like that, only tax, fuel, insurance. We would not need a second car, as there are enough unused cars in the immediate family that could be used in an "emergency," and my fiancée intends to take a remote job.

On the subject of rising living standards:
We find most things that others with high incomes strive for quite boring. We don’t need an expensive car; the Opel we can take over from the family is enough for us. We don’t need a vacation in Bali or 3 weeks in the USA. Of course, we’ll probably do that someday – but if the house is paid off first, the first few years will be spent at home or maybe a week at the Baltic Sea, no problem. We don’t buy expensive clothes, expensive jewelry, or any other classic "luxury." At most, we have a weakness for our hobbies – espresso machines, bicycles, home cinema, and similar. On the one hand, we are now so well equipped there that no big purchases will have to be made in the next few years; on the other hand, we are always very careful only to spend money that is actually there. If the hobbies have to take place with the equipment we have for the next 10 years, then so be it. There is simply no other way.

To say it plainly: We are absolutely resistant to letting our living standards slip. We have exactly one "luxury" dream: A great house with a great garden where you can live as a family. That’s it. I come from a working-class family where every purchase was and still is carefully weighed. If I waste money senselessly, I get reprimanded. o_O:D
 

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