Is it possible to prefer external financing (retrospectively) over equity?

How can it be that the commitment interest rate is higher than the agreed nominal interest rate?

That is actually an additional profit for the bank or the return for the bank not charging commitment interest for, for example, one year, even though the loan commitment actually costs money. Even if the bank gives you a concrete financing confirmation (and not just the usual vague statement), it has to cover equity and incurs costs.

And couldn't the bank then – like the borrower – simply "draw everything down right away"? Or are there laws that prohibit it?

The bank could. But why should it do so and give the customer the money even though he has not yet secured any collateral (i.e., construction progress). In good situations, this is of course reasonable, just like advances.

In the end, you simply have to negotiate every component of the conditions with the bank. And this is actually possible; the 3% (until a year ago we were even at 3.6%!!!) are not set in stone. BUT: The bank always gets its money somehow. The customer also pays for the bank appraisals – commercial clients still as real costs today, consumers earlier as well and now incorporated in the terms.

The fact is, the bank generally pays out according to the construction progress. Payouts "in advance" only to avoid [Bereitstellungszinsen] will therefore not work. Especially since the bank then has an unfinished property as security, while on the other hand the entire loan has already been paid out. One would thus lose the (longer) leverage. The fact is also, the bank must make corresponding "reserves" for granted but not yet paid out loans, which in turn costs money (simplified). The fact is also, that usually 12 months of [bereitstellungszins]-free time are priced into the bank’s margin. Anything beyond that must be paid. By the way, it is not uncommon today to agree on a longer period without [bereitstellungszinsen]. However, that often costs a surcharge on the regular interest rate (many do not want this but then complain about the [Bereitstellungsprovision] if it occurs). In case of doubt, clarify everything with the bank. There are banks that extend the period until the [Bereitstellungsprovision] applies relatively uncomplicated (and free of charge) - others simply refuse. The full annuity is usually due for the first time in the month after the complete payout.

The house always wins!

Thank you both for the explanations!

The bank always wins!

Thank you both for the explanations!

You could see it that way

another argument that is always brought up. A lot of equity is available and used later. Now the borrower goes and speculates with Wirecard, goes to the casino or buys the newest Porsche for his new secretary (Knick Knack). All has happened before.

The bank then also has to bear the risk of additional financing, it is obligated to do so. If it refuses, the customer can terminate early and switch.

Equity before debt, in my experience there is the whole spectrum. Some banks have told me "no problem at all," others "no way." The better your creditworthiness, the more banks say the former. But there will always be some who say the latter. Anyway, I would put it in writing. Afterwards, the bank can simply refer to the contractual terms.