Calculation of placement interest, expiration of billing

Hello everyone,

the right timing for concluding a loan agreement is known to be a fine art and of course very speculative.

I am therefore currently in the process of calculating the amount of possibly incurred commitment interest based on a concrete financing offer. We are planning with a very long (25-30 years) fixed interest period. Even the smallest changes in the interest rate have an extreme impact because of the fixed rate (0.1% upwards quickly amounts to 10,000 EUR...).

The commitment interest (by the way 0.17% p.m., 12 months free) with a (too) early conclusion in terms of timing is also not insignificant, but maybe it makes sense to accept it. To calculate as realistically as possible, I would therefore be interested in the typical timing of invoicing for a new build. The "standard payments" according to construction progress are standardized, but the timing "unfortunately :rolleyes:" is not.

Briefly about the framework data (these are from my own pen, no offer yet available):
- Construction start approx. July/August
- Construction with fixed price contract
- Living area 185 m², fully basement
- Classic brick construction, no complicated architecture
- Construction costs about 400,000 EUR

Can you share your personal experience regarding the timing of invoicing? Many thanks in advance for your responses!

No, the payments according to construction progress are not standardized. They are individually specified as percentages in the contracts for work.
Furthermore, a shell construction, which usually wants to be paid with one installment after completion, can take 2 days, but also 2 months.

For a calculation, you could, for example, assume a construction period of 18 months and pay out 1/18 each month... that means the issue is only relevant for 1/3 of the loan amount and is accounted for at half of the pm interest rate for this amount.

Calculated on the total loan amount, that is only 1/6 of 0.17% pm and that for 6 months.

If we are talking about a loan amount of 300,000 euros here, in this example we are talking about 510 euros. And even if the construction period is 24 months, we are talking about 1530 euros here...

There are other, more relevant things.

Hello everyone,

yes, I had already thought about it in that way, I just wanted it to be a bit more realistic. The construction phase will hopefully take <12 months...

The bank advisor said that usually a big chunk is due relatively early at the beginning of the construction phase - hence the question about your experiences. But it’s true, a few hundred euros here or there don’t really make much difference...

Thanks!

So for us, 48% of the house construction sum is due by the completion of the shell construction (including roofing). The shell construction takes about 6 weeks to 2 months. Up to that point, the earthworks (including sewage shaft / channels) are also paid.

The next item, after the shell construction completion, is 12% – window and front door installation. After that, it gets rather more leisurely.

Hello,

we also paid according to the construction progress and quickly benefited from the interest payment. I believe after the shell construction about 50% had already been drawn down.