What can we finance?

You have a great income, but also crazy prices to pay. A few things are unclear:

- When will the rented apartment be paid off and generate net cash flow?

- Would the first child still be possible in your current apartment?

- Is the property a plot of land and you have calculated construction costs on it, or is it an existing house?

Background of the questions: I cannot tell if it might be sensible to sell the apartment to have more liquid equity. But then you give up a retirement asset, so much for owner-occupied home and retirement provision...
Also, you will probably never be able to save as much as you do now, because living costs are currently unbeatable cheap for Munich standards.
As long as you have a plot of land in mind, I would buy the land now if I were you. It will remain stable in value or even increase in your area despite rising interest rates. Existing houses might possibly then become easier to get again.

With a saving rate of 4,500 by the way, I think that exceptionally you are saving faster than prices rise. Off the cuff I would therefore, in your situation, continue saving first and not yet build/buy – hence my advice with the plot of land.

Feasible yes (otherwise several banks would not offer the financing), if both of you work your entire lives. The question is whether you want to pay the bank over €3,000 every month or if there are alternatives like, for example, a condominium, a bit more commuting. Your lifestyle will also be restricted, especially once there is a child.

You must decide what a house is worth to you.

Southwest of Munich is possibly the wrong direction price-wise to search (near Starnberg?). But at that price (if a house or around 100 sqm condominium) I assume it is NOT located within the Munich city area. Commuting is - unfortunately - already included! Depending on the exact location, including one or two of the biggest traffic bottlenecks in the Munich area (although - traffic jams are now everywhere on the roads...)

As I myself was once interested in the current status: 3 rooms, 63 sqm in M-Aubing for €526,900 is, at a glance, the cheapest I found. Ok, in the same complex there would also be 41 sqm available for an unbeatable €343,900 according to Immoscout, but two rooms are one too few for plans to have children.

If it would also be conceivable for you to sell again in the worst-case scenario, in my opinion you could try it. It also depends on the rate you aim for.

If the property now costs €800k. €80k are already gone. So only €60k less buffer remain. That is then a 92.5% financing.

Possibly the free land charge on the rented property could serve as collateral. Then one might have up to €50k more and possibly come under the 90% threshold.

By a savings rate of 4,500, I am of the opinion, by the way, that you are exceptionally saving faster than prices are rising.

That is a question I have asked myself from time to time. It may be that I am saving and barely keeping up with the price increase - but maybe I have a higher equity percentage-wise?

Just as an example: €500k purchase price, let's say no equity (except for the incidental costs). That results in 100% financing. You save for a while, then you have a €600k purchase price but have also accumulated €100k equity. The loan amount is the same, but now you only have to mortgage 83% and are better off in terms of conditions.

I had 6.5% property transfer tax in TH, which looks significantly better in Bavaria. The broker also wanted 5.95%. So that adds up. If these costs only apply to the land (because you build yourself), it looks friendlier again than with an existing house.

Just as an example: €500k purchase price, let's say no equity (except for incidental costs). That results in 100% financing. You save for a while, then you have a €600k purchase price but have also accumulated €100k equity. The loan amount is the same, but you only have to finance 83% now and are in a better position in terms of conditions.

If you roughly calculate it, the interest rate would have to be almost halved due to the better loan-to-value ratio in order to repay the €600k just as quickly at the same installment rate as the €500k before. Hard to imagine.

Your rent is quite a bargain. I would continue renting here and save good equity. Or will you stay in Munich for your whole life?