Evaluation of land financing offer

Hello,

I would very much appreciate feedback on the following offer.
Land purchase, variably financed:
Purchase price + ancillary costs = 120,000, equity = 50,000 -> loan = 70,000

Nominal interest rate: 0.95% / Effective: 1.28%

Thank you very much!

I assume the high difference to the effective interest rate comes from a [Grundschuld]? That should be avoided if possible. Otherwise, you will also be tied to the bank later.

They should be avoided as much as possible. Otherwise, you remain tied to the bank later on.

It is variably financed anyway. Then the OP pays off eventually and transfers the land charge.

... yes, and pay for the amendment of the mortgage again including the delay. And as you can clearly see, the costs disproportionately drive the interest rate up.

Firstly, the land charge can be assigned. For this, nothing needs to be deleted and re-registered. Apart from that, I doubt that anyone would finance 70k without a land charge, and if they do, the conditions will be well above the aforementioned effective interest rate. In my opinion, the interest rate is very good for a variable one. Usually, the rates are relatively high there.

1. Is the assignment free of charge? 2. Over what holding period is the stated effective interest rate calculated? If construction is to begin in 1-2 years, the actual interest rate will probably be significantly higher than the stated one. I'm not saying the offer is bad, but would say the dessert that must be ordered is not to my taste. PS: We financed 80K for the plot without a land charge, it wasn't difficult even though not all banks do it.