The facts – building society contracts, the three phases & the building societies

Taking out a building savings contract can make sense in many situations. However, there are many facts that need to be considered. From the right building society to the exact sums and interest rates that are recorded in the contract to the start of the three phases. We will provide you with all the important facts:

The most important at a glance

• Different building societies offer different tariffs for building savers
• The comparison of the building societies is worthwhile for every building saver due to the different offers
• Building savings banks function with the help of payers and payees
• The building societies provide a flow of money and earn the same from the interest.
• A certain amount is saved in the savings phase
• Once the minimum amount has been saved, the loan can be disbursed.
• In the loan phase, the loan is repaid with monthly payments

Find out more about building savings in our big guide to building savings!

The building savings contract – various tariffs of the building savings banks

Different building societies sometimes have significantly different tariffs. A comparison in the search for the best building savings contract is therefore highly advisable. When making a comparison, various key figures must be taken into account, such as the interest rate on the loan. But other factors are also important, such as the interest rate on the credit balance and other important key points of the contract.

However, the comparison is not easy in any case, as different interest rates are combined with different savings and redemption periods. These key data must then be matched with the wishes and individual situation of the saver. It may well be that an offer with a significantly higher loan interest rate is the better choice, as the time to allotment is shorter than with the other variants. Tip: Obtain various offers from different providers for a building savings sum and compare them on the basis of the key figures mentioned.

• Different building societies offer different tariffs for building savers
• The comparison of the building societies is worthwhile for every building saver due to the different offers

The building societies – this is how the principle works

Building societies specialise in issuing building savings contracts. There are different parts that work together to make the principle of bauspar work. The three phases play an important role here. Building savings banks always have depositors and payers. The payers, who pay in so-called savings rates during the savings phase and the payers, who repay the bauspar loan during the loan phase.

The payers are those in the allocation phase who both receive their saved assets and can draw the loan. The money in a bausparkasse thus flows back and forth from the depositors to the disbursers. The bausparkasse itself earns its money from interest paid by the bauspar customers at various stages.

• Building savings banks function with the help of payers and payees
• The building societies provide a flow of money and earn the same from the interest.

The three phases – savings, allocation and loan phase

In the savings phase, a certain amount is first saved. This usually corresponds to 30-50% of the volume of the building savings contract. For this purpose, the building savings amount, the loan interest rate and the repayment amount must be determined. Only when this sum has been saved in full is the contract ready for allocation and the loan can be disbursed.

In the allotment phase, home loan and savings customers have two options. The credit balance and the state premiums can be paid out or the bauspar loan can be used for home ownership. In the latter case, the building society pays out both the savings balance and the loan, i.e. the entire bauspar sum.

If the saver decides to take out the loan and use it for home ownership, the building society pays out the saved credit and the loan, i.e. the entire building society sum. Subsequently, the loan is repaid by the saver to the building society in monthly interest and redemption instalments.

• A certain amount is saved in the savings phase
• Once the minimum amount has been saved, the loan can be disbursed.
• In the loan phase, the loan is repaid with monthly payments

The advantages and disadvantages – predictability with high repayment rates

Building savings contracts also have their advantages and disadvantages. These can help you to assess your own situation when deciding for or against a building savings contract. However, whether a building savings contract is worthwhile depends largely on the individual situation and cannot be determined across the board. All advantages and disadvantages at a glance:

The advantages – predictability, security and low interest rates on loans

A building savings contract offers many advantages for people in different life situations. Particularly as partial financing for a property, building savings is ideal, as it promises predictability and security. The financial means are available to the saver when he needs them and the loan interest rates are comparatively low. All advantages at a glance:

• Building savings can be planned in advance and determine when money is available for financing construction, purchase, conversion or modernisation measures.
• Building savings is suitable for people who are looking for security in the long term
• It is possible to secure low interest rates on the loan for a long time and until the end of the repayment period
• A building savings contract is supported with many different state subsidies
• Building savings remain flexible for the saver despite the ability to plan
• Special payments are possible at any time
• The saver has limited freedom as to when the building savings sum can be used
• The financial resources are available to the saver when he needs them
• The loan interest rates for building savings contracts are usually very low

The disadvantages – low amounts, partial financing and high repayment rates.

However, the building savings contract also offers disadvantages and reasons why such a contract is not suitable for every situation. For example, the contract is not suitable for short-term real estate financing, since a certain amount must first be saved. In addition, a building savings contract is only suitable as partial financing, as it usually involves smaller amounts. All disadvantages at a glance:

• The building savings contracts are usually only for low amounts, so that the building savings banks can secure the favourable interest rates.
• Building savings are not suitable for short-term real estate financing
• The repayment instalments demanded by the building societies are comparatively high
• A building savings contract is not suitable for financing an entire property, but only as an additional financing sum.
• The fees at the conclusion of the contract are relatively high at building societies
• There is no absolute planning certainty, as the payout date depends on the savings portion.

The most important questions on the subject of building savings

The topic of building savings is not easy to understand and holds many technical terms and difficulties for inexperienced. So that no questions remain unanswered for you, the experts of Lukinski still answer all important questions around the topic of building savings.

How can I cash out my building savings contract?

Theoretically, a building savings contract can be paid out at any time. However, the payout depends on the phase the investor is in. In the loan phase, the sum is paid out automatically as soon as the minimum savings balance is reached. During the savings phase, however, the contract must first be terminated in order to receive the assets saved up to that point.

What is a building society contract?

A building savings contract is a savings contract between the investor and the building society. The building savings contract is a form of investment in which a fixed part of the sum is first saved before the loan sum is paid out. The building savings contract is therefore divided into two phases. The first is the savings phase, in which the minimum savings balance is saved. In the second phase, the loan phase, the loan amount is disbursed and gradually repaid by the investor.

What does a building society contract cost me?

The costs for the building savings contract vary from bank to bank. In addition to the costs for the interest on the loan, there are also costs for the conclusion and account management fee. These costs are an important indicator for comparing different tariffs.

What is the taxable income?

Taxable income is a term used in tax law. It describes the assessment basis for the tax assessment of income tax. It is calculated using a rather complicated formula and is therefore not easy to determine for laypersons.

What is the standard savings contribution?

The standard savings contribution describes the monthly amount to be paid and is based on the amount of the building savings sum. The contribution is specified in the building savings contract, but can be changed at any time depending on the contract.

Is it possible to transfer a building savings contract?

Yes, a building society contract can be transferred to a relative. In most cases, the previous conditions are simply retained and thus the rights and obligations are simply transferred to the relative. However, you have to agree with the building society in advance whether a transfer is possible in your contract.

How long do you pay into a building savings contract?

A term is agreed in the building savings contract, but this can usually be adjusted at any time. Often a minimum term of 18 months is agreed and the term is limited to a maximum of 20 years. How long is ultimately paid in depends on the sum and the repayment amount.

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• Is a covered or uncovered major platform on a house
• Intended for outdoor use
• Creates a transition between the interior of the building and the adjacent garden
• Located on the ground floor level or on the roof of a building
• Increase in the quality of living, which also increases the value of the property

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Becoming a real estate agent – What you should consider

The first question you have to ask yourself when you are about to choose a career or want to change your career again is whether you want to do an apprenticeship or whether you would rather study. There are many arguments that speak for completing an apprenticeship and also many that reinforce the choice of studying. We have for you for the time being a small pro – con list, which should help you to decide.

Training – What are the arguments in favour?

In-company training is usually divided into a school-based part and a vocational part. There are block models in which you first spend a longer period in school and then a longer period in the company or the other way round or also a model in which you spend half of a week in school and the other half in the company.

Per

• A lot of work experience
• Earnings -> faster independent
• High degree of independence
• Further training opportunities
• Chance of being taken on

Contra

• Lower pay (in many cases)
• Strict regulations

Study – What speaks for it?

A study usually lasts 3 years until the bachelor and you have the option of a master, which usually lasts 1-2 years to attach. The student learns at the university mostly through seminars and lectures. Internships are also integrated into many courses of study.

Per

• Often good promotion prospects
• Often high starting salaries
• Course of studies does not commit to a profession
• No pressure -> independence

Contra

• Costs
• No work experience

If you decide you want to complete an apprenticeship, it is important to then narrow down your interests so that it is easier for you to decide on an apprenticeship. Here I will now introduce you to the training profession of real estate agent.

The job description

Real estate agents have a diverse range of activities. They not only buy, sell, rent and lease land and real estate, but they also advise customers on real estate issues, organise and accompany construction projects and also carry out both office work and field service tasks. The everyday life of real estate agents is therefore varied. They not only work in the real estate industry, but also in building societies, in real estate departments of credit institutions or in building management companies. Depending on which company you choose for your apprenticeship, the tasks can vary greatly.

The training

Training as a real estate agent lasts three years. In most cases, the training is divided into an in-company and a school-based part. Before you decide to start this training, you should check whether you have the necessary prerequisites. There is no fixed school-leaving qualification which one must have in order to be able to start this training. Nevertheless, the probability that you will quickly get an apprenticeship is much higher if you have a high school diploma. Math and German should have belonged to your strengths in school, because a real estate agent must be able to deal with numbers and also a good expression is very helpful in this profession. Good real estate agents usually bring a good ability to persuade and a good stamina, because these strengths are very advantageous in the sale of real estate.

The procedure

At school, you will learn theoretical knowledge that will help you in your day-to-day work. Your report book will always accompany you during this training. Among other things, activities and learning progress must be recorded here. In the middle of the training period you will have to take an intermediate examination and at the end you will have to take three written and one oral final examination. As soon as these have been successfuly completed, the training is finished and the employer will either offer you a full-time position or terminate your employment relationship.

Promotion opportunities for real estate agents

After completing their training, real estate agents have various opportunities for further professional development. If you would like to continue your education, you have the option of further training to become a business economist for real estate or a specialist in financial consulting. It is also possible to study in some areas as a result of the training. If you have gained sufficient professional experience, self-employment could also be an option for you.

The merit

The salary during the apprenticeship as a real estate agent is staggered. In the first year of training it is around 780 euros gross. In the second year of training, the salary usually increases to approx. 890 euros gross and in the last year of training to approx. 1000 euros. After the apprenticeship, a trained real estate agent can expect to earn between 1800€ and 2400€. As you continue to gain work experience, the starting salary will increase. How high the salary can become at the end depends on various factors, such as the area of responsibility.

If you have discovered the profession of real estate agent for yourself, you can use the website Indeed to search for an apprenticeship. Here, the ads are updated regularly and you can get a little closer to your dream job.