At the moment, I live together with my wife in Germany. We are renting a house here, which costs us €690 per month in base rent.
We both work in the Netherlands, so we are cross-border workers.
We have €25,000 in savings to buy a house. The house we have in mind will cost €334,000. With the current interest rate (around 4.5%) and a 30-year annuity mortgage, this would amount to about €1,670 gross per month.
Over a period of 5 years, we would spend approximately €41,400 on rent. If we buy the house, the total gross mortgage payments over 5 years would be about €100,200. Would it then be smart to buy this home since our expenses will rise significantly? Or perhaps we should save a few years and then buy a home, considering real estate value does not rise as rapidly in our area.
Extra context:
We are both in our early 20s and have a combined gross annual income of approximately €120,000, we expect this to increase during our working lives. We hope to have children in about two years, my wife will then work a bit less. We do not have any debts and we live a modest life. We are able to save ±€3000 per month.To buy or keep renting?
Disclaimer:
We are buying a German house with a German mortgage. This means that we cannot flip the house as we would then need to pay a fine which comes out to; whatever the remaining years of interest is we would have paid otherwise (with a max of 10 years).