Question about financing in tranches / maximum amount

Hello everyone,

we have purchased a single-family house plot in a large German city entirely with equity. Purchase price >800 TEUR. A new single-family house with a garage is to be built, building permit granted.

Debt financing is needed between 250-450 TEUR.

My question: Is there the possibility of "tranche financing" WITHOUT the obligation to draw the maximum amount? For example, registration of a 450 TEUR land charge with the bank. Fixed draw of 250 TEUR and then twice 100 TEUR "if needed."

Previous inquiries: I have spoken with the known mortgage brokers. Total loan 450 TEUR, 10 years, interest 3.1-3.2% for 10 years no problem. "Tranches" absolutely not.

What do you think? Thanks and regards

I have not seen this anywhere until now.
If this does not exist, I see 2 possible solutions:

1. Register 450 in the land register and if the need is over 250, just talk to the same bank advisor again. But of course, you are tied to him. I have done something similar for a rental property with the house bank and it worked as desired.

2. Take the full amount of 450. Often 5% special repayment is included "free of charge." So you can repay the amount you do not need relatively quickly.

What do you think about that? Thanks and regards

I think and have implemented: Take the rest and invest it. It's not everyone's thing - I understand that. My wife also has a very different attitude about it. There is substance in both attitudes. If it's not about "being right," you can accept both at the same time.

My question: Is there a possibility for "tranche financing" WITHOUT the obligation to take the maximum amount? For example, registration of a 450,000 EUR land charge with the bank. Fixed drawdown of 250,000 EUR and then twice 100,000 EUR "as needed"

What do you think? Thanks and regards

First of all, land charge and loan are two completely different things.

Now to the question. Yes, that's possible. But it costs a lot. Therefore, and because there is no demand, there is almost nothing like that on the market. Why? Just for a credit commitment alone, the bank already incurs costs. Collateralization with equity capital, for example. And depending on the bank, also coverage with liquidity.
It's basically like you're always being charged for non-drawdown.

When I look at our financing contract:
- 10% of the financing amount do not have to be drawn without penalty.
- 5% special repayment per year.

With the values above, this would mean that if only 250,000 are really needed* and 450,000 were taken out:
405,000€ would have to be taken at most.
22,500€ can be repaid as special repayment per year.
=> In less than 7 years, one would have balanced it out even with the lowest maximum financing needs. And during that time, you can also invest the money. Or put it into the construction project. Because (* = ) building is more expensive for most than initially thought.

It also includes different fixed interest periods, either all or part flexible or only fixed for 3-5 years. Then you can repay immediately or relatively short-term. Since the house will also cost a few €, equity and income seem to be available, so I would invest the money not needed as well.