Should the entire equity be contributed in property financing?

Hello,

my girlfriend and I have found our dream plot but are not yet that far with the house planning. I have inquired through several loan brokers and the following options have come up, to which I have a few questions.

Brief info about the project:

Plot: 1500 sqm at €86/sqm = €129,000
Equity: €45,000
Combined net income: €4500
Expenses: €400 warm rent including additional costs, other expenses (insurance, groceries, etc.) approx. €400

The house construction is scheduled in 1-1.5 years. Therefore, I have requested variable loans and fixed interest loans with short terms:

Fixed interest loans:

Bank A

Loan amount: €108,000
Interest rate: 1.9%
Term: 1 year
Repayment: €1000

Bank B
Loan amount: €108,000
Interest rate: 1.4%
Term: 2 years
Repayment: €1000

Variable loans:

Bank C
Loan amount: €110,000
Interest rate: 2.0%
Term: -
Repayment: €1000

Bank D

Loan amount: €105,000
Interest rate: 2.75%
Term: -
Repayment: €370

Now to my questions. Is it wise to invest the equity immediately into the financing to secure a low interest rate? I am concerned that I might have problems with the second financing for the house construction regarding the value of the plot. If I'm unlucky, the bank calculates the plot value based on the standard land value (€67), and then my equity is practically lost or not considered, right?

What other options are there that I have not yet considered to carry out a sensible financing?

Thanks in advance for the answers =))

With the interest rate differences and the manageable term, I would recommend a variable loan to you. That makes it more flexible. Also inquire at local savings banks/banks, some do this without collateral. I just closed one at 2.05%. That saves you the fees for the land registry office and notary, which corresponds to about 1% interest in your case.

How the bank values the property as equity varies, standard land value map, purchase price, market price, many things are possible.

The question is interesting, I'll read along here. According to Interhyp, it makes no difference because the preliminary loan is considered as part of the overall property financing. However, I believe to eliminate all doubts it would be wise to include the large amount in the construction loan.

One should rather hold cash as equity. Better to pay 0.1 more.

One should rather keep cash as equity. Better to pay 0.1 more

If the banker says so, he must be right!!

If the banker says that, he must be right!!

I say that too. You still need liquid funds for enough other things.