How do you take the interest into account from the purchase of the land until moving in?

So I have now looked at our contracts again and it is as follows: From 01/30/19, the full repayment amount + interest on the drawn amounts + commitment interest on the undrawn amounts will be debited. Of course, interest is already being paid on the drawn amounts before that.

This amounts to about €1,831 per month with an estimated and realistic remaining loan of €213k. This then decreases to €1,598 once everything has been drawn.

It wouldn't have been so bad if we had started building in the spring. Oh well, shame about the money.

But this also shows once again how important equity capital is in financing and thus a low interest rate is.

For example, with 100% financing of €550k and 2.6% nominal interest in connection with construction delays, you can quickly end up on the sidelines.

But this also shows once again how important equity is in financing and, consequently, a low interest rate.

However, the low interest rate can also backfire in your situation. If you pay 1.6%, then 3% commitment interest really hurts. On the other hand, if the loan is already at 2.5%, you barely notice the difference. For most people, it is anyway the case that repayment only begins after full disbursement.

Our bank advised us that when we approach the end of the [bereitstellungsfreien Zeit], it is better to simply disburse the remaining loan amount in order to pay interest rather than [Bereitstellungszinsen]. Of course, this is only possible up to a certain extent.

Our bank advised us that when we approach the end of the interest-free availability period, we should simply have the remaining loan amount paid out, to pay interest rather than availability fees. Of course, this only works up to a certain extent.

We will do the same. I believe the amount discussed was around €20k - €25k. Unfortunately, the bank did not want to commit to this contractually. But well, we are not that far along yet.

Thank you very much for your answers.

I conclude that the interest from the land purchase onwards is indeed a significant item that often goes unnoticed. Maybe in my case not as high as described in the original post, but it is still part of the incidental construction costs.

In my case, from day one for the next 1.5 years at least the land costs + incidental purchase costs - equity
= 280,000 + 20,000 - 70,000 = 230,000 loan would be subject to interest. At 2%, that alone is 6,900 euros in total interest.

Depending on the construction progress and loan drawdowns, additional interest will accrue, so in total it is a low five-figure amount. This has nothing to do with the commitment interest. This is the normal loan drawn down.

Why this should not be included in the cost overview is beyond me. Of course, I can theoretically cover this from my monthly income. But with my monthly income I could also pay for the construction electricity, the construction road, and the entrance platform. And yet these items of course appear on my list of incidental construction costs.

Off-topic:
About the expensive land and cheap house: we are building in the southern commuter belt of Berlin. 450 euros/sqm. So 620 sqm cost 280,000 euros. There you are allowed to build a 1.5-story house. It starts at 180,000 euros for 140 sqm, plus 40,000 euros for the fireplace and small items = 220,000. Otherwise mostly standard construction method, we are modest, we don’t need more.

Somehow, the 550k€ loans with a loan-to-value ratio of 105%-90% are currently increasing. I find that alarming.

Well, it always depends on the circumstances.

If I weren’t still paying off 3 condos in Berlin on the side, I would also have more equity available for a house. However, because of that, I also get an interest rate of 1.6% on the 90% financing. Indeed, the loan-to-value ratio doesn’t really play a big role for the banks here, since even the 90% financing is a safe bet for them.