Financing suitable building land separately before house construction

How is it possible not to reach zero with a €40k financing and four years of repayment? :D The plot of land costs €50k including notary and land transfer tax and a small buffer. Having contributed €15k, you need €35k and full repayment (if you find someone to finance that for you) at 1.5% until 30.03.2018 - then you're done.

Yeah, you could do it like that. Surely a bank would agree if you can comfortably pay €1000/month. That way, you can already buy your chosen plot today and have a real piece of equity that you can’t spend on something else :) and you will have already tested three years of financing with rather manageable risk. The only question is whether you can afford to set aside €1000 per month for that since rent and ancillary costs will continue.

Who can help with financing?

I would like to start with a relatively small installment, thinking about 500-600 euros per month, and repay the rest flexibly with special repayments relatively quickly.

With most, I always read about only 5% special repayment p.a., but I would like to have as many special repayments as I want and also more than 5%. I want to pay the equity capital of 15k as a special repayment in about 3 months, since I otherwise have nothing left on the side and still have some time to save at least a little.

Thanks+Regards

We also bought our plot in advance with a variable interest rate. According to our financial advisor, switching banks is then no problem. The interest rate is then possibly somewhat higher than with a fixed term.

How exactly does it work with a variable interest rate?


Please also read the question at the very bottom of page 2, thank you!

With a variable loan, the interest rate changes monthly, i.e. this month you might have 1.5%, next 1.4%, the month after next 1.6%, and so on. Variable loans are actually cheaper; the longer the term, the higher the interest rate.

The advantage: You can make special repayments at any time. The disadvantage is the interest rate risk, but if it goes up, you can also fix it for, e.g., 5 years. Our remaining loan for the [ETW] currently works like this.