Building loan
Comparis explains the ins and outs of building loans. Find out what a building loan is and how it works.
iStock / Dilok Klaisataporn
Building loan is a real security secured as an overdraft, which serves the financing of a new building or reconstruction.
At the beginning of the building phase, the building loan is meant for the payment of the craftsmen bills. After completion, the building loan is transformed into the favoured mortgage (consolidation).
The building loan interest rate depends on the interest rate for the 1st mortgage. Additionally, annual credit commissions of approx. 1% and surveillance charges of approx. 2 - 3% of the building loan apply.