Loan drawdown (čerpání úvěru)
The payout of money under an approved and signed loan agreement. The bank usually sends it not to the client but straight to the seller, into escrow or to the developer, and only once the drawdown conditions are met. For a finished flat the loan is drawn in one go; for construction and renovation it is drawn gradually. You pay interest only on the amount the bank has already paid out.
Example
A loan of CZK 4,000,000 over 25 years is approved for building a house, and the first tranche is CZK 1,000,000. At 5.00 % you pay interest of roughly CZK 4,167 a month on the amount drawn. The full annuity payment of CZK 23,384 usually starts only once the whole loan has been drawn.
In practice
The contract sets a final drawdown date. Miss it and the bank may cancel the undrawn part or charge a fee. Some banks also take a commitment fee on the amount not yet drawn, so check the price list. When buying through escrow, line up the drawdown date with the payment date in the purchase agreement, as a delay can cost you a contractual penalty to the seller.
How it differs
Staged drawdown is one form of drawdown, typical for building work. Drawdown conditions are the documents you must give the bank before it releases the money. A pre-mortgage loan is drawn before the lien is entered in the land registry, and once it is registered the bank converts it into a standard mortgage loan.
Related terms
In-depth guide
Calculate your own situation
Instead of abstract definitions — enter your own parameters and see the result for yourself. No registration, no form, no salespeople.