Buy property in advance with family advance payment

With a variable loan, you can solve the interim financing. You can repay this at any time. Small disadvantage: The interest on this loan is fixed for only three or six months.

And variable loans are usually somewhat more expensive (higher interest rate), if I see that correctly, right?

Yes, correct, they are indeed somewhat higher, but in return there is the option to repay the loan at any time. This makes sense, for example, if the land is to be bought beforehand/must be bought beforehand but the exact start of construction is not yet known. Before unnecessarily "wasting" commitment interest, I would use the option of the variable loan.

And variable loans are usually a bit more expensive (higher interest rate), if I see that correctly, right?

Yes, but there is no prepayment penalty for early repayment. The bank charges for this risk. Or conversely, you pay a premium for this right you need.
It’s like with special repayment options or changes in repayment. Banks also charge for those (but you don’t notice it).

Since we are already on the topic of [variables Darlehen].

Do the banks decide the interest rate based on the expected repayment date?

So, if I take out a [Variables Darlehen] now and plan to repay it completely within the next 12 to 15 months, do they charge more interest on it than if they don’t know when it will be paid off?

I’ve heard that, for example, professional investors often finance variable because supposedly they do better than with fixed interest. Then it should actually be cheaper. But as far as I’ve understood, it is more expensive.

Sorry, I’m a total layman in this field.

Do banks decide the interest rate possibly based on the expected time of repayment?

So, if I take out a variable loan now and plan to repay it completely within the next 12 to 15 months, do they charge more interest on it than if they do not know when it will be repaid?

A variable loan also gets a fixed term and then becomes due. So the bank already calculates whether they have the effort for only 6 months or can earn money for 24 months.

I once heard that, for example, professional investors often finance variably because they supposedly fare better than with fixed interest.

They finance based on the 3-month Euribor (which cannot fall below 0) and then add the bank’s margin and liquidity costs. In addition, an exit fee is agreed (basically a prepayment penalty, which is charged in tiers according to the remaining term of the financing). BUT: Unless LTV/BLA are extremely low, the investor must conclude an interest rate hedging transaction (swap or CAP).

I calculated for an investor a few days ago. The fixed interest rate was cheaper than the variable option (this is due to the negative Euribor, which the banks do not pass on).

Thank you for your explanations , now I’m wiser! I think when the time comes for us and we know exactly how it should proceed, I’ll start a separate thread