What happens if my new build project is delayed?

If your new build project is delayed you may have to pay additional fees called “Bereitstellungszinsen” or commitment interest fees. If your loan amount is not disbursed within the agreed timeframe called the “bereitstellungszinsfreie zeit”, the bank will start charging you commitment interest fees of 0.15% to 0.25% on the unpaid portion of the loan per month.

Thus, the bank compensates for the loss resulting from the lack of interest income for the already guaranteed net loan amount. As a rule, these fees only accrue after a certain period of time, the so-called "Commitment fee-free period".

There are big differences in both the commitment fee-free time and the level of commission fees between banks, while some banks require fees after only two months, other institutions offer a zero-interest-free period of up to 12 months without any additional charge. In some cases up to 15 months, in some cases up to 24 months, are possible without interest deduction. Deployment rates are often 3 percent per year (0.25 percent per month).

Thus, these commitment fees can make a seemingly cheap loan expensive or an expensive loan cheaper, as you can see in our example (see below). These costs should be scrutinized when selecting your mortgage product. Your mortgage expert will help you to optimize this important topic for you after having your consultation.

Example
Mortgage Offer 1Mortgage Offer 2
Property Price350.000 €350.000 €
Loan Amount330.000 €330.000 €
Commitment Fee free period3 months12 months
Commitment Fee0,25 %0,25 %
Expected Move-in Month15th month15th month
Interest Rate1,10 %1,20 %
Total Interest over 10 years32.566 €35.513 €
Total Commitment Fees paid6.027 €2.719 €
Total Costs38.593 €38.233 €
Total savings0 €360.49 €

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