Financing Follow-Up

A financing follow-up represents a significant step, especially for those whose construction financing is nearing its end. While the initial financing phase often concludes with a fixed interest rate and a defined term, a new financing arrangement is typically necessary after this period. Timely planning of the financing follow-up offers the opportunity for substantial savings.

There are various options available for financing follow-up: the classic extension, the forward loan, and refinancing with another bank. In the case of an extension, the existing loan agreement with the current bank is extended, usually with minimal effort. However, it is important to carefully review the offered conditions, as the interest rates are often higher than those of other options.

A forward loan allows securing current interest rates for the future – especially advantageous when an increase in interest rates is expected. This type of loan can be arranged up to five years in advance, providing a degree of planning certainty. The downside is that there may be additional costs associated with longer lead times.

Refinancing with another bank often represents the most cost-effective option. This involves taking out a new loan with another bank to settle the existing loan. However, a careful review of the offers is essential, and possibly a new credit check may be necessary. Additionally, switching costs, such as notary and land registry fees, may be incurred, which should be included in the calculations.

It is crucial to inform yourself in advance about the various options and to compare offers. Generally, one should take action at least one year before the expiration of the interest rate lock.