Building savings contract – In the past, the building savings contract was considered the classic savings investment for anyone who wanted to fulfill the dream of owning their own home. A few years ago, there were higher interest rates for building savings, which made the offer more interesting for potential owners and the savings higher. But even today, despite lower interest rates, the building savings contract has not lost its appeal and forms a stable foundation if you want to build a house, finance a condominium or purchase an existing property.
Building savings are counted as equity capital and thus reduce the amount of money that you should integrate into a real estate financing without building savings. If you are building savings, you only need to worry about the ancillary purchase costs in the equity capital, while the other share of the equity capital is offset against the building savings sum.
Building savings contract as equity: real estate financing
Each building savings contract starts with a savings phase, which usually lasts between 7 and 8 years, depending on the building savings sum.
Conclusion of contract and building society sum
When concluding the contract, you determine the desired building savings amount and calculate the monthly expenses that you need to save the desired amount. There are interest rates on building savings contracts which, although not very high at present, are nevertheless a basis for your later real estate purchase. After the savings phase, a building savings contract contains 40 percent of the sum you have estimated for your real estate purchase.
Savings phase, then loan phase
In phase two, i.e. after the end of the savings phase, the loan phase of the building society contract begins. This amounts to 60 percent and gives you the opportunity to obtain favourable construction financing through the building society. A bauspar contract becomes ready for payment the moment it reaches the 40 percent mark and automatically enters the loan phase.
Have you already built in the meantime or do you not currently have a property in mind that you would like to finance? If so, when you move on to the loan phase, you have the option of having the amount you have saved plus interest paid out and using the money as you see fit. A building savings contract is worthwhile for young families, couples and singles who want to acquire residential property and purchase it at a later date.
How does building savings work?
In fact, there are so many questions about the home loan contract:
How long do I have to pay into a building savings contract?
How does it work with the building society contract?
Which building society savings amount makes sense?
Why is building savings useful?
Before you decide on a building savings contract, you should inform yourself in detail about the interest rates and contractual details. The offers for building savings contracts are versatile and vary in their contractual components from building society to building society. Therefore, it is worthwhile to make comparisons and find the offer that optimally suits you in its interest rate and the framework conditions.
Stay flexible during the contract term by choosing a building savings contract with variable payments or special payments, for example. If you want to increase or decrease the bauspar sum, this option should be available to you at no additional cost. Such variable bauspar contracts are not standard, but are still possible with some bausparkassen.
For whom is a building savings contract worthwhile?
A building savings contract offers you the advantage of being able to use the saved sum instead of equity capital and to create a basis for real estate financing.
Since you receive interest on your savings amount, you can increase the capital in contrast to a savings without interest and reach your goal of 40 percent much easier. Many home loan savers wonder why the savings amount is 40 percent when 20 to 30 percent equity is sufficient for construction financing. Keep in mind that there are additional purchase costs to be paid off in addition to the real estate price, which, depending on the region, amount to between 13 and 15 percent.
In the building savings contract, the ancillary costs are included at 15 percent and you are left with 25 percent equity capital, which you bring into the financing.
From building savings contract to own property
The path from the building savings contract to your low-interest financed property consists of four steps. First, before you conclude a building savings contract, you determine the building savings amount and pay the closing fee for your contract. Now the savings phase begins, for which you have to allow between 7 and 8 years, depending on the payment and the building society sum. Once you have reached 40 percent of the contractually agreed building society sum, your building society contract is ready for payment. This means that you will now receive an offer for a property loan from the building society.
Building savings offers from the experts
Of course, you can obtain other offers of conditions and compare whether the building society offers you the best conditions or whether it is more worthwhile to have the savings sum paid out and finance your real estate purchase in another way. Experts for building savings do not only recommend a building savings contract adapted to your needs, but also calculate your individual advantage when your building savings contract is ready for payment. Would you like advice, to compare your personal conditions and to find the best real estate financing?
Hire experts.
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