Should I ask my client for equity

Muscle mortgage - save money with your own contribution when building a house?

If you want to build a house, you need equity for solid financing. Experts recommend contributing at least 20 percent of the total amount plus the additional costs of the purchase or new building to the real estate financing yourself. In addition to savings, fund shares and shares or building society savings, you may also be able to use your own contributions to building a house as equity. In the following, you will find out what is important when it comes to the so-called muscle mortgage.

What is a muscle mortgage?

The muscle mortgage is the contribution that you as the building owner can save on building a house yourself. You are always doing your own work if you do not commission any third-party trades - such as painters or tilers - but rather carry out manual work yourself. Of course, this also includes the measures that your friends or family members help with.

Allow the muscle mortgage to count as equity

With most mortgage lenders, you can claim up to ten to 15 percent of the construction costs if you lend a hand. In this way, you increase your equity ratio and you can potentially benefit from a lower loan interest rate. Financing costs can be reduced by a few thousand euros over the entire term of the loan. However, some banks have set maximum amounts for personal contributions. In addition: You must understandably carry out the planned personal contribution to the house construction and the resulting muscle mortgage and have the value confirmed by a specialist (architect or building contractor). Often the banks also require proof of qualification. Because not every hobby craftsman is able to carry out insulation properly, for example.

Muscle mortgage as a financing component - this is how you calculate correctly

If you have technical skills, ideally you should realistically determine the value of your muscle mortgage before the financing meeting. The best way to do this is to make a list of the planned activities that you can do yourself or with the free support of friends and family.

Note: Use only labor costs to calculate the muscle mortgage. Because even if you could get the material you need cheaper, these savings are usually not recognized by the banks.

For a realistic labor cost estimate, you can obtain offers from craft firms in your region. The amount of the labor costs corresponds to the savings through personal contribution. When you add the savings for all the trades you do yourself, you get the value of your muscle mortgage. Some banks have also set maximum amounts for personal contributions.

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Time investment - the most important factor in the muscle mortgage

The time required for the planned personal work is usually underestimated. As a rule, builders work full-time - even during the construction phase. The work set for the provision of the muscle mortgage can therefore only be carried out after work, on the weekend or during the vacation period. But at some point the holiday quota is used up and your own strength dwindles due to the months-long double burden of job and construction site. In addition, as a skilled do-it-yourselfer you need around 50 percent more time for the work than a professional.

So you should calculate realistically how much time you can work on the construction site in addition to your family and job. As a guideline: If you want to save ten percent of the construction costs with a muscle mortgage, you have to plan around 20 hours per week. According to the VPB, around 850 working hours are required to fit out a 140 square meter house. That means it would take a good ten months for the house to be ready for occupancy. It is best to get advice from an experienced site manager with regard to the targeted muscle mortgage and ask him for a realistic estimate of the time and effort required.

Muscle mortgage - technical know-how is in demand

Think carefully beforehand which work you can really do yourself. Because errors in electrical installations or the laying of floor coverings can not only destroy the savings potential, they can even cause additional costs.

Rule of thumb: You can usually do the work inside or outside the house on your own. Accuracy tasks, i.e. services in which low material costs meet high labor costs, are usually suitable for skilled hobby craftsmen. The walls, their inner workings and functional areas of the house, on the other hand, belong better in the hands of a professional.

The largest muscle mortgage can therefore be realized in interior construction. Because there are numerous jobs here that you, as an experienced do-it-yourselfer, can do without special machines:

  • Painters
  • Laying laminate, parquet or carpet
  • Tile walls
  • Drywall
  • Design of the outdoor facilities

However, you should leave work on essential areas of the house to a specialist. These include electrical installations, gas pipes and water installations. If you have appropriate specialists among your family or friends who support you in building the house, a professional inspection should be carried out afterwards.

It is also important that you do not hinder the construction progress with your work. Therefore, for your muscle mortgage, only choose work that is not based on any measures that have to be carried out by a specialist. Otherwise the construction phase could drag on unnecessarily. This in turn can result in commitment interest depending on the loan agreement. In addition, the double financial burden of loan installments and rent increases.

Muscle mortgage: How much do you save through personal contribution?

The amount of potential savings can vary greatly in individual cases and depends, among other things, on the following factors:

  • Size and shape of the house
  • used material
  • Hourly wages of the trades (depending on the region)

The Association of Private Builders e. V. (VPB) has determined guide values ​​for possible do-it-yourself savings [as of 2017]. The basis was a 140 square meter row house.

Who is responsible for their own contribution to building a house?

The contractor assumes no liability for work that you have carried out yourself. When calculating the muscle mortgage, you should always take into account that you will have to pay for the repair of construction defects as a result of your own contributions. To prevent disputes, it is advisable to contract with the construction company in advance who will carry out which work. If the work cannot be clearly demarcated and one of your own work is transferred to the construction company, you should document everything precisely and carefully check the work performed by the specialist for construction defects. You should only start your own work after any deficiencies have been rectified. In the opposite case, it is also recommended that your services are first approved by the site manager. This procedure is indispensable in order to determine, in the event of defects that only appear later, whether you need to improve yourself or whether you can assert warranty claims against the building contractor.

Muscle Mortgage: How To Properly Insure Construction Aid

When friends and family lend a hand on the construction site, you must also ensure their safety. That means: You have to secure the construction site in accordance with the legal requirements and take out accident insurance for all helpers from the Construction Employers' Liability Insurance Association before construction begins. Because the protection of the statutory accident insurance does not apply if the helpers are damaged on your construction site.


With a muscle mortgage, you can reduce construction costs by up to around 15 percent. And the financing costs can also be significantly lower if you have your own contribution to building a house counted as additional equity and thus benefit from the lower borrowing interest. However, in addition to the professional qualifications, you should not underestimate the time required and the physical and psychological stress. Take advantage of further savings potential when building a house. You should therefore seek comprehensive advice from a specialist in advance.

Save up. To build. Life.

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