Construction start September 2021 - When to take care of financing?

Hello dear forum members,

We signed the construction contract about 2 weeks ago. The planned start of construction is September 2021. According to the construction company, the first invoice is also due at that time. Now the question arises as to when it would be most sensible to start the construction financing in order to ultimately avoid commitment interest as much as possible. Are there any financial specialists here who can give a forecast of the construction interest rate? Do you expect an increase in interest rates in the next few months or even a decrease?

Of course, we already obtained initial offers from the bank this summer and thus also have a financing confirmation. Now it is practically only about the most sensible start, since our preferred bank has so far not been able or willing to offer us an extension of the commitment interest-free period (beyond 1 year).

We would be happy about your answers, assessments, and support. Thank you in advance.

Now the question arises for us as to when it would be most sensible to start with the construction financing in order to ultimately avoid as much as possible any commitment interest.

I would look into financing in the spring.

Are there also financial specialists here who can give a forecast of the construction interest rate

Yep. The forecast is stable, slightly rising, or slightly falling. The serious answer is that nothing will happen on the interest front next year. Nothing means +/- 0.5%, which at the current interest rate basically means sideways movement.

since our preferred bank has not yet been able or willing to offer us an extension of the commitment-interest-free period (over 1 year).

You pay for the free time - either as an interest surcharge, which of course no bank openly discloses, or as actual commitment interest. Therefore, waiting until spring is my suggestion.

Wait as long as you can handle it yourself. We completed in 01/2018, but due to delays caused by our neighbor, we could only start 4 months later (10/2018), and the last loan was only drawn down now (09/2020). This happens when the outdoor facilities are co-financed.
There were 12 months "free of charge."

So wait as long as possible, but if you want to be able to pay out quickly, you must immediately meet the bank’s payout conditions; otherwise, there will be no money when you need it.

We are facing the same dilemma. The building application will be submitted within one month, processing of the building application: approx. 6 months. Construction time guarantee: 8 months. Therefore, we will probably finalize financing in February/March 2021.

Thank you very much for your answers. Then we will probably also tackle the whole thing at the beginning of 2021.

Honest answer? I am currently noticing in my environment that some people are having real difficulties getting a loan. Even people who would have easily gotten the money before Corona. I don’t know your numbers and jobs, but getting loans is becoming more difficult and will certainly not get easier in the coming months.