Take advantage of the current low interest rate for construction financing

Hello everyone,

we are planning to build our own home next year. We want to finalize the plans with the architects over the winter and the start of construction is planned for spring. Moving in is therefore scheduled for the end of 2012... In the end, it will be a prefabricated house made of timber frame construction (+[Keller]), so we are currently optimistic that the schedule will be kept.

Now we suspect that we will only have the completed documents and the cost calculation from the architect by the end of January. However, since we will probably have to borrow 200,000 EUR despite some equity, we will have to deal with the banks.

Therefore the question: How can we best secure the current low interest rates (today they are at 2.6% for 10-year bonds) today for our building project??? :confused:

Because I believe that the construction interest rates will be higher next year and if not, it’s not a big deal, because we can live quite well with the current rates and would prefer to be on the safe side. ;)

Thanks in advance for your tips and advice.

Best regards,

Hello Toka170980,

2 brief ideas:
- Forward loan
- conclude now with the longest possible interest-free availability period (some cooperative banks offer up to 24 months) or accept the availability interest as the lesser evil

You should now accelerate the planning... Even a prefab house has delivery times...

Best regards

Hi!

The key question is always what the lender thinks of your creative ideas.......:rolleyes:

As far as I know, you can forget about a forward loan - and whether you can get a loan agreement purely on a planning basis......
I had to fill out all the paperwork again because I took a building plot 50 meters away from the originally planned one.
The tip about the interest-free drawdown period :rolleyes: is good. I had 1 year with H....K, 2 years would be great.......

But: If you are not debt-free after 10 years - choose at least 15 years fixed interest rate!

Cheers, TomTom.

So I would also rely on the banks' availability period – you always get 3-12 months interest-free. Just ask to explore the chances.

Thank you all! I now have to speed up the planning a bit so that we also have an exact cost plan, then I will get in touch with the banks and see how much they charge during the interest-free commitment period. Regards,