Guide · Reference work

Real Estate Finance Glossary: Terms A–Z

From annuity loans to interim finance: In our glossary on real estate finance, we explain the most important technical terms around Senior Loan, mezzanine capital, bridge finance and property development finance – short, precise and without Chinese.

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40 Terms · Last updated: 18. July 2026 · Tested by Jürgen Kronawitter

What is at stake? Professional real estate finance has its own language – rank, expiration, covenants, subordination. This glossary translates the central terms of financing of purchase, construction, portfolio and refinancing into clear definitions and puts them into practice. Each entry refers to the appropriate financing modules.

annuity loan Loans with a constant rate of interest and repayment – the standard of investment property finance. View the definition →

Borrower The party to the loan agreement, often a property company backed by a sponsor. View the definition → Bridge finance interim finance to a secure capital inflow – fast and exit-oriented. View the definition → Bridge loan Short-term, terminal loan up to sale, refinancing or disbursement. View the definition → Bullet loan finance bullet loan: only interest on an ongoing basis, repayment at the end in a sum. View the definition →

Covenants Contractual obligations and key performance limits such as LTV or DSCR in the loan agreement. View the definition → Credit rating Risk classification of the lenders – controls margin, expiry and collateral. View the definition → Creditworthiness Credit rating: economic and personal suitability to service a loan. View the definition →

Debt servicing capacity Ability to sustainably bear interest and repayment from income. View the definition → DSCR debt service coverage ratio: Ratio of property yield to interest and repayment. View the definition →

early repayment charge Interest damages for early redemption during the fixed-rate period. View the definition → Equity Self-injected funds – risk buffer and key to terms and returns. View the definition → Equity kicker Participation in the lenders’s success, typical for mezzanine financing. View the definition → Expenditure grant Housing benefit for self-serving owners in the event of high burden. View the definition →

First-ranking loans First-ranking secured loan – the most favorable foundation of the capital structure. View the definition → fixed interest rate period Period with fixed borrowing rate – usually 5, 10 or 15 years. View the definition → Fixed-rate period Period with guaranteed borrowing rate – synonymous with fixed borrowing rate period. View the definition → Forward funding An investor funds a development in stages as construction progresses and acquires the completed property. View the definition → Forward loans Follow-on finance with interest fixed today and up to 60 months in advance. View the definition → Funding gap Distance between project costs and available capital – structured closeable. View the definition →

Interim finance Short-term loan up to a fixed capital inflow. View the definition →

KfW funding Low-interest development loans and grants for new construction and renovation. View the definition →

Land charge Flexible means of securing real estate finance – regardless of the claim. View the definition → Land charge priority Order of liens – determines the risk and price of each tranche. View the definition → Land register Official register of property, charges and liens of a property. View the definition → Lending limit Maximum share of the mortgage lending value that a lender finances – usually 60–80 %. View the definition → loan renewal Extension of the loan at the previous lenders after the end of the fixed interest rate period. View the definition → Loan term Period until full repayment – demarcated from fixed-rate period. View the definition → LTV (loan-to-value) Loan-to-value: the ratio of the loan amount to property value, a central risk metric. View the definition →

MaBV Broker and Builder Ordinance: Rate logic and security obligations in the purchase of a property developer. View the definition → Mezzanine capital subordinated capital between own and debt capital – the leverage for property developers. View the definition → Mortgage Accessory property lien – today largely replaced by land charge. View the definition → Mortgage lending value Conservative permanent value of a property as the basis of the credit decision. View the definition → Mortgage rate The borrowing rate for secured property loans, influenced by capital markets, the property and creditworthiness. View the definition →

Profit-participating loans Loans with profit participation instead of or alongside fixed interest. View the definition →

remortgage Repayment of a loan by a new lender on better terms. View the definition →

Senior loans First core tranche of real estate finance with the most favorable conditions. View the definition → Subordinated loans Loans ranked behind the bank – most common form of mezzanine capital. View the definition →

Term sheet Basic data document of financing: conditions, collateral, conditions. View the definition →

Whole loans Senior and subordinated share as total financing from a single source. View the definition →

Frequently asked questions

Glossary Real Estate Finance – A Short Answer

What is the purpose of this glossary for real estate finance?

It explains the central technical terms of professional real estate finance – from key figures such as LTV and DSCR to security rights such as land charge and financing forms such as mezzanine capital and Whole Loan. The goal is an understandable orientation for property developers, property developers, investors and property investors.

Who is the glossary aimed at?

To professional market participants who want to classify financing offers, term sheets and capital structures. The terms are explained practically and with the appropriate Services linked.

Does the glossary replace financing advice?

No. The definitions create understanding, but do not replace individual case examination. Concrete structures and conditions arise only after examination of project, collateral, equity and repayment – the fastest via our Free initial estimate.

Next step

From the technical term to the appropriate financing

You now know the terms – we structure the appropriate financing. Submit the key data of your project; we usually report to you within 1–2 working days with an honest initial estimate.

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