With a construction loan, you can build or buy a property (house, apartment, etc.), renovate or modernize it. To do this, you take out a real estate loan. This loan is earmarked for a specific purpose and is not freely available to you as the borrower. It must therefore always be used in accordance with its purpose.
The most important facts about construction financing
Construction financing involves taking out a loan to cover the costs of buying or building a property.
Equity capital is the be-all and end-all; there should be at least 20% of the loan amount to guarantee the lowest possible construction interest rate.
A low interest rate leaves more room for a higher monthly repayment rate.
For construction financing, there are many different financing products to customize the loan to the customer.
Construction financing calculator
Construction financing explained
Construction financing: overview & definition
Many banks offer construction financing. When taking out a mortgage, you should always make sure that it is as close as possible to your current personal situation. A decisive factor is the current construction interest rate and the amount of your equity.
Since construction financing is not a fixed financial product, construction financing can take place in various ways. Here is an overview of the most important types:
Building savings contract or building savings loan
Annuity loan
KfW loan
Mortgage loan
Renovation loan
Life insurance or pension insurance as financing
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Advantages of construction financing: Individual and flexible
Due to the variety of financing offers, construction financing can be adapted very individually and flexibly. Based on your current situation and personal preferences, you can select the payment plan that suits you best. As each offer has different conditions, there are also advantages and disadvantages for each construction financing offer, which everyone must weigh up for themselves.
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Construction financing: costs & equity
To know the cost of your desired property, you must first determine your equity. In addition, you should calculate your maximum monthly repayment rate.
In addition, the amount of the monthly repayment installment depends on the amount of your equity. The higher the equity, the lower the interest and the monthly payment installment. At the same time, the equity should at least cover the incidental costs of the real estate purchase. In an ideal financing, the equity capital covers the incidental costs as well as 20% of the purchase price.
Incidental costs of construction financing
Incidental costs are incurred with every real estate purchase. The one-time incidental costs consist of costs for land register entry, broker & notary fees and land transfer tax.
The amount of the incidental costs differs depending on the state. Here in brief, with these additional costs you must expect:
Real estate transfer tax (3.5% to 6.5% of the purchase price)
Notary fees (up to approx. 1.5% of the purchase price)
Brokerage fees (approx. 3.57% to 7.14% of the purchase price)
Land registry costs (up to approx. 1.5% of the purchase price)
Was ist ein Annuitätendarlehen?
With an annuity loan, the construction loan is paid off in constant, equal installments. The annuity is made up of interest and repayment. The loan installment does not change until the fixed-interest period has expired.
Was ist ein Volltilgerdarlehen?
A full repayment loan is a form of construction financing in which the loan is repaid in full over a fixed period of time. At the end of the period, the borrower is debt-free.
Wie hoch sind die Nebenkosten?
Depending on the federal state, the additional costs vary. In total, you may be charged up to 12% of the purchase price.
Was gehört zu den Nebenkosten?
Incidental costs when buying real estate include land transfer tax, notary fees, a broker’s fee and the cost of land registration.
