Stomach ache due to these large home financing numbers

Dear forum,

I signed up here because my wife (29) and I (34) are considering moving back to our rural home region and building a house in the not too distant future, after years of restlessness in various big cities in Germany. We are still at the very beginning and everything is still very vague. However, the numbers I have to juggle give me a stomachache, so I am asking for an assessment.

We have about 95,000 euros in equity (all together). I am a lifelong civil servant and earn around 3,800 euros net per month, with my monthly net income increasing by about 100-150 euros every two years (again in April 2018) until the maximum level of about 5,000 euros is reached. My wife has a permanent job and earns around 2,300 euros net, in two years she will earn about 2,900 euros (this is contractually regulated).

For our current rental apartment (120m²) we pay around 1,500 euros net per month. After all other expenses, we save around 2,000 euros per month, although I must say that both of us will have car loans in the next three years. We have - NO - children yet, but we are planning that.

Since our apartment is already 120m², we should get bigger with a house. We are aiming for 160/170m². Part of the living space (e.g. an office) can gladly be in the basement. The basement should be included, as well as a garage. I am aiming for a plot size of about 700m², anything above that will be too big for us, especially with regard to garden maintenance.

Developed plots in our home municipality cost 170 euros per square meter. Architect and engineering services will not incur (!) costs for us. Regarding the garden, some work can perhaps be done by ourselves, but that is still too vague to rely on. I estimate a volume of around 500,000 euros in total. Is that too optimistically low? We would then be dealing with a loan amount of 400,000 euros. This amount worries me because of its size, whether it is manageable. I calculate back and forth and think that at 30 years and 2.5% interest we would end up at around 1,600 euros per month. That corresponds roughly to our monthly cold rent. Would you still have concerns in my place or go ahead? The numbers discourage me.

I think that reads well. You have good equity, a good income, and saving habits are also appropriate. And when children come, you will receive [Kinderzuschlag] as a civil servant, which also makes parenting periods manageable.

First determine the exact costs, then you'll see what can be done. I would definitely approach it because it is realistic. Karsten

Sounds absolutely doable to me as well. Everything seems quite familiar, except that we are already "done" with the children. We also have a similar loan amount, our plot of land cost about the same, we built larger (200 m²) but without a basement. We ended up at 500k with pretty good equipment. The payment fits easily, parental leave doesn't hurt much. We financed over 10 years at 1.4%, so more risk than most, but we don't feel uncomfortable with the remaining debt.

Absolutely no problem. Although I might also consider looking at 15 years, as you might even end up under 2%, which would be a significant saving. Of course, you have to weigh beforehand whether that wouldn't be too "uncertain" for you.

You are clearly worrying unnecessarily. Civil servant, the partner also has a secure job. 6100 euros income and 95000 euros equity? I seriously wonder where the problems should be.