Mortgage loan for a new build: complete guide

The construction mortgage loan differs significantly from credit intended to purchase an existing property. The bank does not unlock the entire amount at the signing of the authentic deed but proceeds with a release by instalments corresponding to site progress. This generates a specific construction loan mechanic: intercalary interest, technical bank checks, adjusted loan-to-value conditions. Understanding this new house financing before signing avoids three major pitfalls: underestimating the total credit cost, exceeding the acceptable loan-to-value, or getting stuck between builder down payments and bank releases.

The release-by-instalments mechanism

Unlike an existing-property purchase where the bank pays out the capital in one go, the construction loan provides for an instalment release schedule, calibrated on the builder’s fund calls (compliant with Breyne Law Article 9). The type schedule:

• Instalment 1: at the authentic deed, payment of the land share (20 to 30% of total price).
• Instalment 2: at the end of foundations and base slabs (5 to 10% additional).
• Instalment 3: at roof closing / weather-tight shell (15 to 25%).
• Instalment 4: at technical finishes (special techniques installed) (15 to 20%).
• Instalment 5: at delivery / provisional reception (10 to 20%).
• Balance: final release after final reception (5% remaining Breyne Law security deposit).

At each fund call, the bank verifies the actual progress (sometimes via a mandated expert), validates the builder’s invoice and releases the instalment. This procedure protects the borrower against overpayment but burdens administration.

Intercalary interest: an often underestimated cost

During the construction phase, the borrower pays intercalary interest only on the actually released amounts, without capital amortisation. The typical duration of this phase is 12 to 18 months for a standard house.

Example: for a credit of €350,000 at 3.5%, over a 14-month construction period with progressive release (average 60% of capital released), intercalary interest totals about €6,200 to be paid in addition to the classic monthly payments that will start at provisional reception. This charge must be integrated into the global budget.

Some banks offer a “deferred intercalary” option: interest is added to the initial capital, increasing the total cost but avoiding the monthly charge during the site. To study according to available cash flow.

Loan-to-value, duration and 2026 rates

The loan-to-value accepted by Belgian banks in new-build construction stands generally in 2026 at 80 to 90% of total cost (construction cost price + land + fees). Beyond 90%, the file is deemed risky and the rate increases significantly. 100% loan-to-value possible under strict conditions (very solid income, additional guarantees).

Duration: 20 to 25 years dominate, 30 years accessible for young borrowers (under 35). Fixed or capped semi-variable rate depending on profile.

2026 rates: for an 80% loan-to-value over 20 years, fixed or semi-fixed, range 3.3 to 3.9% at the time of writing this guide. Variable depending on bank, profile and negotiation.

Granting conditions: stable income (permanent contract or self-employed > 3 years), debt < 33 to 40%, personal contribution 10 to 20% minimum for notary fees and safety margin.

Case study: €380,000 credit on construction in Wavre

2024 case: couple, 35 and 33 years old, two stable incomes €6,200 net/month combined. Construction project Wavre, total cost price €445,000 (land €95,000 + construction €295,000 + connections/fees/fittings €55,000).

• Personal contribution: €65,000
• Mortgage loan: €380,000 over 22 years, fixed rate 3.55%
• Loan-to-value: 85%
• Monthly payment (after reception): €2,145
• Intercalary interest estimated over 13 months: €6,800
• File fees + outstanding-balance insurance: €2,400
• Total credit cost over 22 years: ~€138,000

The file was assembled with a broker who negotiated -0.2% versus the first offer. Saving over the duration: €8,500.

Pitfalls to avoid

• Ignoring intercalary interest: €5,000 to €10,000 to integrate into total budget.
• Underestimating notary and mortgage registration fees: ~€3,000 to €5,000 additional for the credit itself.
• Choosing too short a duration: the monthly payment becomes unmanageable, bank refusal.
• Forgetting outstanding-balance insurance: mandatory for most banks, cost of 0.15 to 0.40% of initial capital per year depending on age and health status.
• Not comparing at least 3 banks: 0.2 to 0.4% gap possible on the rate depending on profiles.
• Skipping the broker: for 0.2 to 0.3% average savings, their intervention is generally free (paid by the bank).

Articulation with the Breyne Law

The construction mortgage loan must articulate perfectly with the Breyne Law fund calls (payment instalments provided in Article 9). Banks know this mechanism, but you must ensure that the loan contract follows the rhythm of builder calls, without advance or delay.

A particularly sensitive point: the 5% security deposit remains at the notary’s disposal until final reception (1 year after provisional). This sum must therefore be available outside the credit, either as a contribution or via a specific bank guarantee. See Breyne Law security deposit.

Securing your financial setup

New house financing often commits 80% of a household’s future estate. A few hours devoted to comparing offers, integrating intercalary interest and verifying Breyne Law / bank articulation avoid overruns of €5,000 to €15,000.

The firm Mon Etat Des Lieux does not act as a broker but regularly audits the coherence between builder contract, financing plan and Breyne Law warranties before signing. See our Breyne Law support, our new-build notary fees and new house price pages. Request a free quote for a personalised audit of your construction file before signing the authentic deed.