Construction period interest

The borrowing costs are the sum of (ie until the feeder or Start of rental) incurred during construction interest of Real Estate Finance .

They are made up of the interest for the partial amounts already paid out and the commitment interest for the partial amounts of the loan that have not yet been paid out.

The construction period interest can either be paid monthly by the builder as it arises or it accrues over the construction period and must be included in the calculation of the financing requirements.

The first variant leads to the problem with building loans that interest for the new property and rent for the previous one have to be paid at the same time .

An extension of the construction period leads to an increase in the construction period interest and thus often to the need for refinancing .