Incorrect calculations make buying a house tens of thousands of euros more expensive

Interest rates on real estate loans have recently risen again. They are currently close to the four percent mark. This reduces your budget for buying a house. Many make this mistake.

You currently pay 3.6 percent annual interest for a real estate loan with a ten-year fixed interest rate. It’s almost 3.9 percent for a 15-year commitment. This emerges from current figures from the financier Interhyp. This means that interest rates are higher than they were a year ago. At that time it was 3.4 and 3.5 percent respectively.

Even such seemingly small increases in interest rates have a big impact on you. After all, one lasts Home financing usually around 25 years. An increase of 0.4 percentage points already means additional costs of around 23,000 euros for a loan of over 200,000 euros. In addition, such an increase in interest rates extends the term by more than two years if you do not want to increase your monthly payments.

How to calculate your budget

You should consider such data in your planning before buying a house. This is especially true when it comes to calculating the maximum budget. This is the best way to do this:

First, calculate what you have at your disposal Net income per year. This depends on your own income and the income of all partners.
Experts recommend that you spend a maximum of 30 percent of this net income Housing expenses should use. So calculate how much 30 percent is in your case.
Housing expenses are more than just the monthly payment. As a homeowner, you have too extra costs. This includes a reserve for maintenance and repairs. As a rule of thumb, around one percent of the house value is given here. In addition, there is property tax, building insurance and, for condominiums, housekeeping money. The latter can overlap with the maintenance reserve. Overall, you should expect additional costs to be around 1.25 percent of the house price per year.
You must deduct the additional costs from your maximum housing expenses. Since the former are based on the house price, they fluctuate with it. But a rule of thumb helps here too. The additional costs are average 17 percent of your housing costs out of. If you want to be more careful, you can expect 20 percent.
You can use the amount that is left over for a maximum of one person per year Real estate loan spend. As a rule, this covers 80 percent of the purchase costs including additional purchase costs. The remaining 20 percent is equity. You can now use the following formula to calculate your maximum annual rate maximum loan amount calculate:

Loan amount = Annual loan installment * { ( 1- ( 1 + annual interest rate) term of the loan) / annual interest rate }

Because that sounds mathematically complicated, here is a calculation example: If you can invest a maximum of 10,000 euros per year with 3.5 percent annual interest and a 25-year term, the formula results:

10,000 euros * { ( 1 – ( 1+ 0.035)-25) / 0.035) = 197,778 euros

From the maximum loan amount you have to get yours now maximum budget calculate. We assume that the loan accounts for 80 percent of the purchase price including additional costs. So you would need 20 percent as equity. That would be a quarter of the maximum loan amount. In the example above, a quarter of 197,778 euros rounds to 49,445 euros. The loan plus equity then equals the amount you can spend on the purchase. In our example this is 247,222 euros.

You now have to use this amount Additional purchasing costs deduct to calculate the maximum property value you can afford. The additional costs include the real estate transfer tax, broker, notary and land register entry. These vary depending on the federal state. The tax rate alone is between 3.5 percent of the purchase price in Bavaria and 6.5 percent in North Rhine-Westphalia, Saarland, Brandenburg and Schleswig-Holstein. If we assume the national average, the additional purchase costs are around 12.5 percent of the purchase price. Conversely, to calculate the purchase price from your budget, simply divide the budget by (1 + share of additional costs). In our example that would be 247,222 euros divided by 1.125. The maximum house valuewhich you can afford with a loan installment of 10,000 euros per year, 3.5 percent interest rate and 25-year term, is therefore just under 220,000 euros.

The budget fluctuates greatly with interest rates

In this table we have calculated the exemplary budgets for certain income classes and loan interest rates. She assumes that the Credit 25 years runs and the Monthly installment no more than 30 percent of disposable income makes up. You can stretch your budget with higher rates or longer terms. We also calculate average additional purchase costs for this. You should therefore carefully calculate the values again for your federal state and your individual case.

But what the example values also show: The interest rate has a big impact on what you can afford. Every 0.5 percent more interest per year immediately reduces your budget by 4.0 to 4.5 percent. That makes a big difference: If you could afford a property for a maximum of 300,000 euros with two percent interest rates, your budget drops to 256,000 euros at four percent – a loss of 43,000 euros.

Things are getting tight even for top earners

The table also shows how little house most Germans can afford. The average price per square meter was 2,886 euros at the end of 2024. Including additional purchase costs, you paid just under 3250 euros. A Top earners According to the table, someone with an annual income of 80,000 euros could only afford around 68 square meters at the current interest rate. That sounds good enough for a single. Firstly, most big cities are significantly more expensive. Secondly, this also means that someone who is in the top ten percent of incomes in Germany would not be able to finance a house for a family.