Variable loan possible / sensible?

Now, assuming our net equity remains the same for some reason (which is highly unlikely, but worst case). And within 2 years, we have paid off about 40K (target repayment is higher, but just for the sake of assumption). Construction costs have increased by 10% during this time (5% p.a. the current upward trend???). Would a bank even finance the construction with a remaining debt of 100-120K? It’s different when it comes to the land sum than when you finance 40-50-60K variably and have good chances of full repayment.

Either way, it’s somehow tight. Or do banks also count the current land value at the time as equity? For example, if the land appreciates during this time.

Yes, for many people today it is tight to impossible – even with more equity and higher incomes. That is the essence of this crisis, which goes unmentioned. The biggest driver is the scarce land – you yourself mention the increases of recent years – and looking over 10 years it gets even more extreme. And construction itself has of course also increased substantially.

No one can tell you how it will continue. I gathered from your threads that you have relatively high demands. Short vacations, desire for ownership instead of renting, part-time work. Building under the current conditions will completely define your life for a long time. It simply won’t run "on the side." To some extent that was always so, but back then the general demands were much lower.

Therefore, I currently consider it only sensible to calculate a "total price" and see if it is feasible to carry out the project within a reasonable timeframe without interest rate risk over 20+ years. Without creative value increases and other things – buying today, current salaries over the term – is it doable? Then okay and go ahead. Owner-occupation of course, since no one knows when the cycle will turn in the other direction. You have to be able to endure that too...

Did your bank take the increased property value into account and also credit it as equity?

It is said to be the case with some banks, but all the banks we contacted at the time only used the earlier purchase price. Upon specific inquiry (increase in standard land value approx. 25%), one bank informed us that they only carry out a revaluation if the purchase was made at least 5 years ago. We also did it that way, first buying the property with variable financing and then starting construction 2 years later. However, we had variable financing without a land charge, which makes it a bit more flexible and saves costs (we are only repaying the remaining debt of the variable loan now, at the end of January).

Has your bank taken the increased land value into account and credited it as equity? What many hint at here... However, we cannot continue renting here for 10 years and keep paying off the land diligently for that long, so our goal is highly ambitious: to start building in 2-3 years if possible.

That doesn't matter - you can get the land now. And if necessary, you must also be able to build on it if it loses 30% of its value in 3 years. IF you really want it, you have to start. The risk should be bearable for people who are self-employed on the side..

Yes, it is tight to impossible for many today – even with more equity and higher incomes. That is the nature of this crisis, which is not being named. The biggest driver is the scarce land – you yourself mention the increases of recent years – and over 10 years it becomes even more extreme. And the construction itself has of course also increased significantly.

No one can tell you how it will continue. I had gathered from your threads that you are relatively demanding. Short vacations, preference for ownership instead of renting, part-time work. Building under the current conditions will completely dominate your life for a long time. It simply will not run "on the side." To some extent that was always the case, but back then demands were generally significantly lower.

Therefore, I currently consider it only sensible to calculate a "total price" and see whether it is feasible to complete the project within a reasonable period without interest rate risk in 20+ years. Without creative value increases and other things – buying today, today's salaries over the term – is it feasible? Then okay, go ahead. Owner-occupancy of course, because no one knows when the cycle will turn the other way. You have to be able to endure that..

Certainly there are certain demands that could be well met so far, on the other hand I am also aware that building a house brings with it/has to bring major lifestyle adjustments. Whether the desire to build a house / to own is so great that it significantly restricts us – ultimately only we can decide that and we have currently decided to do so, even if it is not an easy decision. At some point youth is also over and the beautiful things in life fulfill you less and less.

Regarding going through with it now: that is already impossible for the reason that I am already receiving maternity pay. Every bank application is therefore rejected in the pre-check. That is why the question is: only finance the land variably now (which I realistically estimate only with my spouse’s salary) and set as a goal to build in 2-3 years, when I can return to normal work and the child goes to daycare. Or completely forgo it and save the money in the bank account (which is more pleasant without external pressure and one can sleep more peacefully, but we can hardly save against the price development).

Thanks :) yes, that is currently our "schedule". But even with the best will, we won't manage to pay off the plot of land by the start of construction. That's why I don't know if our financial situation will look better from the bank's perspective in 2-3 years... Probably yes, IF by then we have paid down some of the land price, the salaries (at least my husband's salary) have increased, and the value of the land has gone up.

Has your bank taken the increased land value into account and credited it as equity? What many suggest here... However, we cannot continue renting here for 10 more years and keep paying off the land diligently for that long, so our goal is highly ambitious: to start building in 2-3 years at the latest.

Who says that the land has to be paid off? We won't manage that either.

The bank does not revalue the land for us because the purchase was only 1.5 years ago.

In those 1.5 years we have repaid about 22k.

For us, the calculation now is: purchase price of the land + construction costs = total costs

Total costs - equity (repaid part of the land and, if applicable, other equity) = financing requirement.

On the topic of following through now: that is already impossible for the reason that I am already receiving maternity benefits.

I meant, as in the previous thread, exactly the purchase of the property + variable financing as a "savings plan" until the start of construction AFTER parental leave..