Provision interest? What does it mean?

Hello, we want to buy a house, now the house is reserved until 31.01.11. We have received a financing offer from Deutsche Bank. However, it says there, after 1 month, a commitment interest of 0.25 per month.

We will have a notary appointment with the seller at the end of January, I think, and transfer the money from the bank to him when the money from the bank is there.

Since we still want to pay rent until 31.04.11, we would like to pay the first installment to the bank in June or July 2011. What do they mean by commitment interest? I do not understand that. Everywhere it says that commitment interest is charged for the unused loan. But we take the loan, for example, for 01.02.11 and can only start paying off the loan from 01.05. or 01.06 because rent and loan repayment is then very much.

Thank you for the answers.

Best regards Christina

Actually quite simple: if you sign the loan agreement on 20.01.2011, you have to pay 0.25% interest on the unused amount starting from 20.02.

Example:
Loan 100,000
If nothing has been disbursed on 20.02, you have to pay 250€ "fees" for the bank making the money available.
If, for example, 20,000 has been disbursed, you pay loan interest on the 20,000 and a commitment fee on the remaining amount of 80,000 (200€).

You might want to try to negotiate 3 months free of commitment fees.

I still don't get it.

So we buy a finished house built in 1952 for over 60,000 euros. But we add 20,000 more for renovation + 20,000 euros equity. That gives us a total of 100,000 completely available.

50,000 goes through DeutscheBank with a 20-year fixed interest period and the other 30,000 through KFW. (=80,000 euros)

If, for example, the loan contract is signed on 20.01.11, we have 1 month free of commitment fees. I think then on 01.02.11 the money is in the account in the amount of 80,000.

Starting from 20.02.11 we would then pay 0.25% commitment interest because we have the money from the bank? Is that correct?

If, for example, from 01.08.11 we start repaying the loan so that we can renovate and have a notice period with our old rental apartment, do we then only pay the commitment interest from 20.02.11 or am I misunderstanding?

If, for example, the loan agreement is signed on 01/20/11, we have 1 month free of commitment fees. I think then on 02/01/11 the money will be in the account in the amount of 80,000.

From 02/20/11 we would then, because we have the money from the bank, pay 0.25% commitment interest? Is that correct?

If we, for example, start repaying the loan from 08/01/11, so that we can renovate and have a notice period at our old rental apartment, do we then only pay the commitment interest from 02/20/11 or am I misunderstanding?

If you receive the money on 02/01, you normally have to pay interest and principal from 02/01 as well, unless you have agreed otherwise. If you, as you wrote, start to REPAY from 08/01, you only have to pay the interest until then.

Commitment interest would then NOT be charged, since you have already drawn the loan.

Now I understand.. Thank you very very much....