Uncertain due to financing

Hello everyone,

currently we are also in the final planning stages for our project [Hausbau]. The financing documents have been submitted to the bank and are being reviewed. The closer it gets to the final signatures, the more uncertain we become about building the house. We are simply being advised against building a house from many sides. What do you think about the following parameters:

90,000 EUR plot of land, fully developed in a new development area
215,000 EUR turnkey house construction ([KFW 70] with 135 net/160 gross m2)
44,000 EUR incidental costs, development (house connections), outdoor facilities, etc.

This totals 349,000 EUR of which 45,000 EUR is equity.
Additionally, the kitchen will be paid from equity --> 8,000 EUR. Then about 12,000 EUR will be available as a reserve.

Income:

Man: 3,100 EUR net (full-time)
Woman 1,100 EUR net (part-time) Planned is one year of parental leave at the end of the year and then back to the job (part-time). We then calculate about 550 EUR for 12 months.

Currently one child and the second is on the way.

Financing local bank:

1. Bank 230,000 EUR with 15 years fixed interest rate at 2.12%, repayment 2%, remaining debt after ZB approx. 154,500 EUR
2. [KFW] 25,000 EUR [KFW 124] with 10 years fixed interest rate 1.7%, remaining debt after ZB 19,605 EUR
3. [KFW] 50,000 EUR [KFW 153] with 10 years fixed interest rate 0.85%, remaining debt 35,800 EUR

Regarding 1., additionally at least 2,000 EUR per year should be paid as special repayment. Furthermore, I am considering securing the interest rate by taking out 1 or 2 building savings contracts of 100,000 EUR or 2x 50,000 EUR (interest approx. 2-2.5%) so that they will be allocated after 15 years.
Regarding 2. and 3., to secure the level of interest, a building savings contract of 55,000 EUR is available (current savings rate 20%) which is planned to be allocated in 10 years (40%). Interest approx. 3%.

Planned rate after full disbursement 1,050 EUR plus new incidental costs 330 EUR.
Previously rent 450 EUR plus incidental costs 220 EUR

What is your opinion?!?

Thanks and best regards

sounds reasonable and doable if "his" income is secure. one must be aware here that basically "he" pays for everything and also basically "he" bears the risk. if "she" earns no money (or little), "he" will be completely garnished in the worst case. it should be affordable as long as your salary comes in. you should just be careful not to want too much at once. special repayments, building savings contracts for future security etc?! wouldn’t a longer fixed interest period be easier? we have taken out a similar loan with a 20-year fixed interest period. in that time the kfw will also be done and we will only have one loan left to refinance.

So, I want to get in touch again now because we have to decide in the next few days whether to buy or not.

Loan: €280,000 + €50,000 KfW House and Living = €330,000 financing
Repayment: 1.5%
Interest: either 2.1% for 10 years or 2.3% for 15 years.
Equity: €35,000 + €20,000 sponsorship for the real estate transfer tax
My income: €3,100 + child benefit (2 children)
My wife: €1,200
Monthly burden: for 10 years: €1,020
Monthly burden: for 15 years: €1,200

We plan living expenses (including insurance, childcare...) of about €2,600 per month. If we add €400 incidental costs incl. taxes and €150 reserves to the installments, we come to monthly expenses of about €4,300. Theoretically, there would still be a buffer of about €300 in case a new car is needed.

We are both now over 40 and will not be able to pay off the house. The plan is still to sell the house again after 20 years and then look for something age-appropriate. Not everyone likes that, but it is a way. We live in the Hessian Bergstraße region, thus in a prime location with very good transport connections and still idyllically situated.

How do you estimate the monthly expenses (€2,600)? Is that immensely high or okay?
Putting the plan with the sale aside: do you find all this too tight? Would the monthly burden be too tight for you?
Is that too big a risk regarding retirement?
We expect that real estate prices in our area will remain high. Currently, prices of €300,000 and more are being asked for 40-year-old houses.
The comparatively low equity is because we simply did not think about a house earlier and traveled a lot. Then the children came.......

So I hope I haven't forgotten anything.

It's just like your poster above. "He" basically pays for everything, "he" carries the risk. You can do that if you want. As you have already correctly taken into account, you also have to invest the €150 monthly savings rate into the house at some point to maintain its value.

I do not understand the rate for 15 years. Why is it 180€ higher? If the interest rate for 15 years is really only 0.2% more expensive, then it is not a very difficult decision.

What do you want to achieve with the financing? The lowest possible costs? As much security for the 20 years as possible? Or as much flexibility as possible?

Loan: €280,000 + €50,000 KfW House and Living = €330,000 financing
Repayment: 1.5%
Interest: either 2.1% for 10 years or 2.3% for 15 years.
Equity: €35,000 + €20,000 sponsorship for the property transfer tax
My income: €3,100 + child benefit (2 children)
My wife: €1,200
Monthly burden: for 10 years: €1,020
Monthly burden: for 15 years: €1,200

The numbers cannot be correct. With 1.5% repayment, neither €1,020 nor €1,200 monthly installments are possible. To reach the monthly burden, the KfW would have to be repaid at over 5%.

The difference between both variants should only be about €45-46. Simplified (without compound interest effect) you can calculate 280,000*0.2%/12 months.