Financing Strategy House Purchase Interest-Free Period

Sure, but I see it as a waste.... Therefore the question about a good strategy

Sure, but I see it as a waste.... Therefore the question about a good strategy

Waste is the wrong word... because the opposite is true: The earlier the repayment is made, the less interest is paid, the cheaper it gets.

What is the schedule: When is the purchase price due? When is the handover? When is the planned move-in?

Are you brave enough to wait a few more months with the financing without potentially regretting rising interest rates? Otherwise, close now, a year without repayment is quite normal.

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In general, I think you should finance in a way that you can afford the double burden for a longer time without capsizing. Vacation and the like just have to take a hit, but you never know how long a construction can drag on.

So for me, part was the purchase price, part for the subsequent construction work. It was agreed that repayment would begin after full disbursement. Interest was due on amounts already drawn. So there was indeed a "double burden"; between the purchase price payment and the move, there were eight months during which I paid interest on an ever-growing amount. In fact, it worked out so that repayment only started after the move because only then was all the money drawn. I didn’t even negotiate this point; it was like that from the bank’s side. There was a "de minimis threshold"; if it was not met, the remaining amount was paid out. I assume this was so that you don’t leave €500 standing and thus suspend repayment indefinitely.

I still don’t understand the situation. You are buying now, but will only get the house handed over in 10 months and want to renovate then. When is the purchase price due? Already now? Does the loan also include amounts for the renovation, which will only be drawn later? That means full disbursement only in a year? Also watch out for possible commitment fees in your case. I had "free" half a year, after which they applied to amounts not yet drawn. This could particularly affect you if the purchase price is only due upon handover.

Agree in the purchase contract that the payment will only take place shortly before the handover. I would not buy and pay for a house that I would only receive in a year. That risk would be too high for me.

Agree in the purchase contract that the payment will only take place shortly before the handover. I would not buy a house and pay for it that I only get delivered in a year. For me, the risk would be too high

But that is the dilemma. He wants to renovate. As a seller, I would insist on payment of the purchase price

But that is the dilemma. He wants to renovate. As a seller, I would insist on payment of the purchase price

Well, but only after handover. And that would be the reason to pay for the house as well. Unless it is an area where real estate is so in demand that the seller can put everything into the contract. Because there are so many interested parties that one will agree.