Your assessment of cost estimation and financing

Hello everyone,

since we are currently planning to purchase a plot of land and build a house, I would like to briefly explain our project to you with the request for your assessment of whether this should all be feasible or if our considerations are completely off.

We are about to buy a plot of land with just under 750 m². Price including property transfer tax and notary fees: 50,000 euros. On this we would like to build a single-family house (possibly with a granny flat) with about 160 m² in Bauhaus style. We have imagined a price of 280,000 euros here (should be a solid house KfW 70 including all additional building costs). We are a bit unsure whether this price is realistically estimated. Furthermore, the house should have a basement (50,000 euros). We have estimated the outdoor facilities at 20,000 euros, a garage/carport (not necessarily immediately) at 5,000 euros. So briefly:

- Plot of land: 50,000 euros (the price is fixed)
- House with granny flat including all additional building costs: 280,000 euros
- Basement: 50,000 euros
- Outdoor facilities: 20,000 euros
- Garage/carport: 5,000 euros
= 405,000 euros.

What do you think: Is this cost estimate somewhat realistic or are we completely off with it? Paying less would of course also be nice, but it should definitely not be more expensive.

We would preferably like to finance via a KfW loan (100,000 euros) and the rest through a normal bank loan. Equity capital is 100,000 euros (cash, no personal contributions). Currently there are two of us and both employed with a monthly net income of approximately 4,200 euros in total (plus a company car for private use, without Christmas bonus, commissions, etc.). Ideally, we would like to repay about 2,400 euros monthly for the first 2 years and – if children should then be expected – reduce the repayment to 1,500 euros. If there is anything left over, we would make special repayments. We want to have the entire loan repaid within 20 years, and we want the interest fixed for the entire 20 years.

In a first bank meeting (Volksbank), we were told that basically an adjustment of the repayment rate is possible in between, but the step from 2,500 euros to 1,500 euros is too big. Does anyone know if all banks see it that way? How large is the allowable range between the installments? Would it perhaps make more sense to repay 1,500 euros from the start and at the end of the year apply the saved 12,000 euros as a special repayment? With what effective interest rate would we need to calculate for the bank loan? The Volksbank person was rather reserved in this first consultation. Which banks at all fix the interest rate over 20 years? With how many percentage points surcharge would we have to reckon for this fixed rate?

Quite a lot of questions at once. It would be great if some would speak up on this.

Best regards,
Behauserin

Hello why,

Your cost estimate is realistic. With a loan term of 20 years, you would have to go with 4-5% repayment, so very high. I find 2% repayment and a 10k annual special repayment option more advisable. This gives you a lower monthly burden and still a short loan term if you make use of the special repayment. The effective interest rate should be below 4% given your creditworthiness and the loan-to-value ratio. Ms. Unger from this forum can surely tell you more precisely. Good luck with the house construction.

Hello,

I also consider the numbers to be realistic. Depending on the region, even with quite good equipment or room for good building technology to keep operating costs low later on.
More than the KfW program 153 is not feasible anyway next year.

Without children, there may not be any state programs,
MAP would possibly need to be checked regionally.

Depending on the term of 20 or 30 years, there is only a 0.06% difference for the KfW share.

Otherwise, I would agree with my predecessor.

Best regards

Unfortunately, there are not many banks that offer a 20-year fixed term. The Volksbank here with me could just about offer 15 years. The Sparkasse did it for me through their insurance. Long terms are offered by insurers/building societies like Debeka, Hannoverische. But that runs as a completely normal annuity loan, so no worries. The conditions are very good with a low loan-to-value ratio and highly recommended. In terms of costs, in my view, the 5' for a garage is somewhat tight. Why not a double garage with a house like that right away?