Construction financing: interest rates, conditions in comparison, tips & calculators
Construction financing – The path to owning your own home or condominium usually involves construction financing. In addition to the classic annuity loan with land charge, there are other attractive and individually calculable construction loans. You can find the most favorable offer through a comprehensive search and comparison based on your personal conditions.
Calculate suitable construction loans with above-average conditions
Surely you have already used the online loan calculator and found out at what conditions you could get your construction loan. This calculation is a first preview of your options, which we offer you at Lukinski with a custom construction financing. Due to the current low interest rates, you can finance very favorably and be sure that with support you will find the cheapest and safest way into your own four walls.
There are several options when it comes to construction loans.
The annuity loan is just one example, even though this construction financing is the most frequently used offer. Alternatively, you can opt for a forward loan or, if you want to finance a condominium, finance with a residential loan. Your credit rating and the equity you bring with you have a decisive effect on the debit interest and the effective interest rate for the construction loan.
If you want to build, a different financing may stand out than if you want to buy. Tell us your personal requirements and provide us with an insight into how much property you want to finance and how long you want to repay. Based on the rates you envisage, we will determine the best conditions and submit a proposal that will convince you and pave the way to home ownership at a reasonable price.
Difference from the classic loan?
Construction financing differs from the classic consumer loan in that the interest rates are more favorable and the term is longer. In financing, the property serves as collateral. The debt is entered in the land register. If the installments cannot be serviced on time, the bank has the right to cancel the real estate loan and foreclose. In this case, it gets back its money or a large part of it. Thanks to this deposited collateral, the bank has the possibility to grant more favorable conditions for real estate financing than for a consumer loan granted without the deposit of collateral.
Extra tip! Do you already know our guide, 9 tips for construction financing? Read it all here:
Comparison of different providers is important
If you want to find out about the possibilities and details of construction financing, real estate agents offer you individual advice. If you want to sell your property, real estate agents are at your side with a package of services. Real estate agents know their way around the market and bring experience to the job. You benefit from individual support and a stress-free sale of your property.
A broker can also help you plan in the area of construction financing.
Individual construction financing from various components
Many real estate buyers take advantage of construction financing because the sum cannot be paid in one lump sum. The financing for a property should be safely planned in advance. Take individual advice, because a financing plan is always adapted to the situation of the builder.
It stands on various pillars. This means that a property is not usually financed with just a single loan. A combination of existing equity, a development loan, a building savings contract and the classic bank loan are the components of financing. It is important to compare the various providers during the planning phase.
Construction financing: interest rates and their influence (credit rate)
Construction financing is characterized by long terms. If the interest rate is just a few percentage points after the decimal point, this can result in four-digit savings over the entire term.
The monthly installments decrease and the interest payments are not as high. Offers from the area of subsidized loans should also be compared before concluding the contracts. A building savings contract that is ready for allocation can reduce the monthly installments, as can equity capital or the provision of personal contributions. Ultimately, it is important that the construction financing is set up in such a way that it can be carried over the entire term. In addition to comparing the various offers, advice is very important.
Incidental costs for construction and moving into your own house
Financing is not completed with the purchase price for the property. You have to reckon with further costs.
When buying a house, fees for the notary and for the real estate agent are due. As a builder, you pay insurance and you should expect to pay the first installments for the new house and rent in parallel. Before moving in, you may need to purchase heating oil. Depending on the size of the tanks and the current market price, this can run into four figures. Also factor the cost of moving into the financing. This is especially true if you are moving to another city and cannot organize the move yourself.
Financing may also include components that are not directly related to the construction of the house. It is advantageous if you bring equity and can liquidate a cash investment or deposit to reduce the cost of the loan. Comparing the offers on the market will bring you additional savings on the cost of your construction financing.
Calculator: Exact planning of construction financing
Calculators are necessary in relation to construction financing to accurately determine the cost of purchasing or renovating a property. A calculator is also used to determine the cost of the loan.
Borrowing costs: interest and repayment portions
The cost of the loan consists of the interest and the repayment portion of the current loan amount. Interest plays an important role here. Since the term of a real estate loan is usually ten years, the interest payment is spread over a long period. If an offer from a bank is only half a percentage point cheaper in its interest rate, you can already save several hundred euros a year. This is also due to the high loan sums, which for most construction financing amount to a six-digit sum. Individual advice is important before taking out a loan.
Construction financing often consists of several pillars and not just a single loan. A building savings contract, equity capital and development loans come before the classic bank loan. The reason for this is that these financings are significantly cheaper than the bank loan in terms of their costs. The calculator helps you to divide the financing among different elements and thus determine the costs with certainty.
Free online calculator for house & apartment
Click here to return to the overview with all online calculator tips:
Read more about the individual topics here:
- Budget calculator
- Budget calculator
- Incidental purchase cost calculator
- Rent calculator
- Repayment calculator
- Interest calculator
We would like to point out that the lowest interest rates alone do not provide information about a really good construction loan that fits your requirements. Only if the entire conditions fit your requirements, the flexibility of the general conditions and the repayment period based on the installment amount you have chosen, you will choose the best construction loan for you.