German Mortgage Glossary

Delayed Project/commitment interest

(Bereitstellungszinsen)

A commitment fee or interest payment becomes payable on mortgages when a minimum period between the mortgage contract agreement and the actual payout has expired. This often happens in case of newly built properties when the project gets delayed and the full mortgage has hence not been paid out. Unfortunately such project delays a frequent occurrence these days. This charge is usually between 0,15% to 0,35% per month from the 3rd month on, but it  differs per bank. You can avoid these interest costs by agreeing on a longer commitment fee/interest-free period.