Baukredit
Baukredit is a loan product used to finance construction projects, typically the building of a home or major renovations. It is common in German-speaking countries and in parts of Europe as part of broader real estate financing. A Baukredit is usually structured as a drawdown facility: funds are released in installments aligned with construction progress rather than as a lump sum, and advances are often tied to the completion of defined milestones or inspections. Interest is generally charged only on the drawn amounts, and repayment may start during the construction phase or after completion, depending on the contract. In many cases, the Baukredit is converted into a long-term mortgage or anschlussfinanzierung once the building is finished and occupied.
Requirements and security: Lenders require a construction plan, budget, schedule, building permits, and cost estimates. The
Risks and management: Common risks include cost overruns, delays, and interest rate changes. Borrowers should monitor