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In Switzerland, the construction loan serves exclusively to finance construction projects (new constructions, conversions and renovations). It can only be granted by a bank or by certain public insurance companies.
At the end of construction, the financial institution will proceed to consolidation, meaning the conversion of your construction loan into a mortgage loan.
For the buyer, construction financing often begins with a seemingly harmless construction loan. Nevertheless, the quarterly commission of such a loan is often neglected and becomes a sore spot down the road.