Solar systems, Oil and Gas Heating or Heat Pump?!

When deciding on a heating system some things must be considered, because there are big differences. Depending on the property, it must be decided individually which system is best suited to heat the entire property efficiently. However, the systems differ not only in their environmental friendliness, but also in efficiency and price.

Solar Thermal: Solar Energy

Solar thermal is the process by which solar energy is converted into usable heat. In residential properties, the heat produced is usually used to heat water or for heating. Depending on the location and conditions of the property, this system can completely replace the previously used heating system.

State subsidy of 2,000 euros

Renewable Energy Reduces Running Costs

The solar cells can replace hot water by up to 50 to 65 percent and thus also cover the majority of the annual hot water demand.

How do Solar Cells Work?

The solar cells on the roof have a special function. So-called absorbers catch the heat of the sun and pass it on to pipes in which a heat transfer fluid runs. This heats up and runs to a hot water storage tank in the building, where the heat of the heat transfer fluid is transferred to the water in the storage tank via a heat exchange. The hot water from the storage tank can now be used directly in the house, both for heating and as hot water. The heat transfer fluid flows back to the solar cells to be reheated. The water in the storage tank can also be used without direct solar radiation thanks to this technology.

Solar System, Photovoltaics, where is the Difference?

In addition to a solar system a photovoltaic system is suitable. This also uses solar energy, but the energy is not converted into heat but into usable electricity. Both systems together free the owner from dependence on large energy companies, because he can now produce both heat and electricity in his own home. If the house is in a good location, the owner no longer needs to rely on externally produced heat or electricity.

Solar system (single family house):

Optimal use of space for energy generation:

Settlement and urban development, favorable energy costs for tenants:

Close-up of the roof with quantities of solar collectors to generate energy for the residents.

State Subsidies for Solar Thermal Energy

The promotion of solar thermal energy is subsidized in various areas. The first point of contact for future solar thermal energy owners should be the BAFA (Federal Office of Economics and Export Control). The conditions of funding are as follows:

1. In the area of one and two-family houses, a lump sum for the construction of a solar system of 2,000 euros can be applied for, which can be used both for hot water preparation and for heating support. This flat rate applies to solar systems up to 14 square meters. With a size of 15 to 40 square meters 140 euro per square meter are granted at gross collector surface.
2. An extension of already existing plants is subsidized with 50 Euro per square meter of gross collector area
3. Solar systems that are used exclusively for water heating can be subsidized with 50 euros per square meter of gross collector area, as long as the area is in the range of 3 to 40 square meters. The maximum subsidy per system is 500 Euro.
4. In addition, certain bonuses are offered, such as a subsidy for the replacement of defective parts or additional installations, such as a heat pump or similar.

Further Subsidies for Solar Thermal Energy

However, the promotion in the field of solar thermal energy goes even further and various banks also offer special conditions when taking out loans for the construction of solar thermal systems. Depending upon individual case it applies here however directly with the offerer to inform and individual offers obtain.

Heating Stock: High Consumption, Low Efficiency

56% find their heating system “insufficiently efficient”. My tip, rely on a humidifier before the heating system is permanently turned up to full power. This will give you the same feeling of warmth at lower costs.

Very few heating systems are efficient, and therefore also cost-saving. Here you can see the efficiency structure in the heating stock in Germany in 2018 and 2019. More than half of the respondents, a full 57% (2018) and 56% (2019), consider their heating system to be “insufficiently efficient”. A real cost eater, if used incorrectly.

• Insufficiently efficient: 56%
• Efficient: 24%
• Efficient and renewable: 20%

Gas heating: Heating with Natural Gas, Liquid Gas or Biogas

Gas heating is probably the most widespread type of heating in Germany and rightly so, because the system offers many advantages. Modern technology, efficiency and inexpensive offers characterize the gas heating. In addition, they are easy to combine with renewable energies, save space and can be easily installed during modernization and renovation.

Condensing gas heaters are currently the best on the market in terms of technology, they replace the constant boilers, which are almost non-existent, and there are also some advantages over low-temperature gas heaters. Condensing gas heaters only use the calorific value of natural gas and liquid gas or biogas and therefore use the heat of the exhaust gas. This results in a very good efficiency and standard efficiencies of well over 100% are achieved. In addition to these advantages, condensing gas heating systems do not take up more space than others and can therefore even be integrated into small niches. Learn more about the topic

• Gas heating and gas-fired boilers!

Hot water and cold water temperature in the heating system:

With all these advantages, however, it should not be forgotten that gas is also a fossil fuel and is therefore more harmful to the environment than renewable energies. However, gas is the most environmentally friendly fossil fuel, as its combustion produces few CO2 emissions and no soot. Biogas is also an alternative, as it does not emit CO2.

State funding for gas heating systems

There are also certain subsidy programs for gas heating systems, which promote both the installation of a gas heating system in a new building and the conversion to gas heating in older properties. The conditions are as follows:

1. 1. The BAFA (Federal Office of Economics and Export Control) promotes gas heating only indirectly. Real estate owners who install an eligible solar system for combined heating support and hot water preparation receive a so-called boiler exchange bonus of 500 euros if they switch to gas heating with condensing technology at the same time.

• Also banks, like the KfW promote the installation of gas heaters by granting low-interest loans to finance gas heating systems. This also includes modernizations but also ancillary costs such as those for radiators, thermal insulation and installations.
• The program number 430 “Energy-efficient renovation – investment subsidy” subsidizes various measures, such as the installation of gas heating systems or the modernization of the heating system.

Oil Heating: Heating with Fuel Oil or Bio Fuel Oil

Oil heatings are after gas heatings the probably most frequently occurring systems in Germany. The function mode is simple and works for decades in the same way. The fuel fuel oil is pumped over an oil pipe to the heating system where it is sprayed and burned. The heat generated during this process is used to warm up the heating water and thus to heat the house. Most of these components can be found in the boiler, which now takes up little more than one square meter of space and can even be hung on the wall, depending on the model.

Advantages for property owners

Oil heating systems offer many advantages for real estate owners, because oil heating has a proven and reliable technology that has proven itself for decades. Besides fuel oil can be procured with low price level and be stored on stock. A connection to gas or district heating networks is not necessary, making the owner independent of energy suppliers. The combustion is very economical and has low emissions. There is also a solution for the environmentally conscious, because bio fuel oil, which is produced from renewable raw materials, covers the requirements for the share of renewable energies and an oil heating system can also be combined well with a solar system.

In addition, disadvantages are to be led, because fuel oil prices are badly foreseeable and the fuel costs must be financed by the owner in advance. In addition, space is needed in the cellar, where the tank can be stored.

Who wants to save on fuel oil costs must also accept an oil smell in the cellar, which can only be avoided by premium fuel oil with fragrances. Who does not heat with bio fuel oil, must besides know that with the burn of oil CO2-Emissionen develops.

• Economical combustion
• Low emission

State subsidies for oil heating systems

The subsidies for oil heating systems are lower than those for other heating systems, but there are different subsidies for oil heating systems to help the owners. The conditions for the subsidies are as follows:

1. With its program 152 individual measures, the KfW Bank promotes higher energy efficiency and a reduction of energy costs. Not only the replacement of the oil heating system is therefore being promoted, but also the installation of a highly efficient circulation pump and a circulation pump.
2. The BAFA (Federal Office of Economics and Export Control) promotes oil heating systems only indirectly, as well as gas heating systems. Real estate owners who install an eligible solar system for combined heating support and hot water preparation receive a so-called boiler exchange bonus of 500 euros when replacing the old heating system with an oil heating system with condensing technology.

Pellet Heating: Ovens with Pressed Wood Residues

A modern pellet heating system is known for low fuel costs as well as for environmentally friendly heating and is therefore one step ahead of conventional gas and oil heating systems. Also the function mode is relatively simple. The wood pellets are periodically delivered to the combustion chamber by means of a feeder, so the correct filling is fully automatic. The heat generated by burning the pellets is used in a separate boiler to heat the water. Thus, both the heating can be operated and the hot water can be produced.

The costs for the fuels of a pellet heating system are much cheaper than fossil fuels, such as oil or gas, but the purchase costs for pellet heating systems are much higher and also maintenance work costs more. In addition, this heating system requires considerably more space than a gas or oil heating system. On the other hand, the pellet heating system is very environmentally friendly.

Wood pellets: size and units

• Diameter: 6 – 9 mm
• Length 10 – 35 mm
• Raw density 1.1 kg/dm³ 1.2 kg/dm³
• Bulk density approx. 650 kg/m³ (0.65 kg/l) approx. 650 kg/m³

Close-up of wood pellets:

State subsidies for pellet heating systems

The funding for pellet heating systems is extraordinarily good. Again, there are different possibilities, which have different requirements. The conditions are as follows:

1. 1. The KfW Bank also promotes here with low-interest loans
   2. The BAFA (Federal Office of Economics and Export Control) wants to make the installation of a pellet heating system as attractive as possible with their subsidy, therefore they offer financial means of the market incentive program (MAP), which do not have to be paid back! However, these unbelievable conditions require strict conditions to make the subsidy possible. These conditions only include pellet boilers with and without buffer storage and pellet stoves with water pocket and combination stoves that can be filled with wood pellets, logs or wood chips.

Heat Pump: Heating with the Heat of Nature

Technically speaking, a heat pump is a system that can extract thermal energy from a medium with low temperatures through technical work and supplied working energy. That sounds first once quite complicated, the principle of the heat pump is however actually quite simple. The heat pump extracts heat from the different energy sources air, earth and water and uses it to heat water for heating purposes. For this purpose external electricity must be supplied, but not as much as would be necessary for a normal heating system.

Heat pumps also have many financial advantages, because the state subsidies are very high here. Banks also offer favourable credit conditions for households with heat pumps. The value increasing function, which a heat pump for a real estate represents, is additionally a plus for the owner. Heat pumps are besides extremely pollution free. They emit neither CO2-Emissionen, nor use them fossil fuels. The lastingness is probably one of the largest advantages for heat pumps, which arrive not only with owners of real estate well, but also by the state are increasingly supported.

State funding for a heat pump

The subsidies for heat pumps are regulated by the BAFA. Banks also offer favorable interest rates for financing heat pumps, but the large subsidies come from the state. Efficient heat pumps with a nominal heat output of up to 100 kilowatts are subsidized if they perform the following tasks:

1. Combination of space heating and hot water (only space heating if hot water is produced by other renewable energies)
2. Exclusively for space heating in non-residential buildings
3. To provide process heat and heat for the heating network
4. Funding guidelines must be fulfilled

Excluded from state subsidies are air-to-air heat pumps and other heat pumps that transfer their heat directly to the air. Heat pumps that produce only hot water are also not subsidized.

BHKW – Heat and produce electricity at the same time

Combined heat and power plants or CHPs for short are known for using energy particularly efficiently. The system is quite simple, because a CHP produces not only thermal energy, i.e. heat, but also electrical energy, i.e. electricity, and that at the same time. Ecologically, the parallel generation of electricity and heat is extremely useful because it results in fewer losses.

The mode of operation is extremely effective, because the CHP works with the principle of combined heat and power generation. During the production of electricity, heat is generated which is normally not used as waste heat and is therefore lost. However, if this heat is used, one speaks of a cogeneration plant. These CHP plants are particularly suitable for large industrial plants, hospitals or universities, as the heat used can be fed into district heating networks or used for production in industrial plants. This model combines the motor, the generator and the heat exchanger in a sound-insulated housing and thus compactly packs all required modules in one block. This is where the name block-type thermal power station comes from.

A CHP can be operated by almost all drives and gets along with almost any fuel. From gasoline and diesel engines, steam or Stirling engines to gas turbines or fuel cells, the CHP can use almost any drive. The fuels are then selected according to the drive system. Thus, a CHP can be very environmentally friendly and can be operated with biogas or regenerative energies, for example, but it can also function just as environmentally harmful with crude oil. The possibilities are therefore broadly diversified and can be individually adapted to the customer’s wishes.

Promotion for BHKW

The subsidies for CHP plants are precisely regulated. The owner of such a plant can feed the electricity into the public grid, similar to photovoltaic systems, and receive compensation for this. The conditions for BAFA-supported CHP plants are as follows:

• The “Law for the Maintenance, Modernization and Expansion of Combined Heat and Power Generation” regulates that operators of a CHP plant receive a supplement for the electricity produced. However, in order to do so, the CHP unit must be approved by the BAFA
• The KfW Bank also subsidizes a CHP with favorable interest rates and good credit conditions

Infrared: Heating with Electricity

Even if the conventional heating systems have proven themselves, infrared heating is definitely an alternative that should be considered. Although heating with electricity is generally considered expensive, there are other factors that make heating with electricity economical. Our detailed guide will tell you which points are important and when heating with electricity is worthwhile.

Heating with electricity by infrared rays

When building a house, the question of the right heating system always arises. There are many variants that need to be considered, and infrared heating is one of them. The model shows many advantages that are well adapted to different life situations. But under which conditions is it worthwhile to install infrared heating and how exactly does heating with electricity actually work?

Acceptable and healthy heat through infrared rays

The radiation of infrared heating works differently than other heating systems, because the radiation does not heat the air in the room, but directly the body. This includes not only the human body, but also walls, ceilings or floors and even furniture. The principle can be compared with sunbathing in winter. With this technique, the body feels the warmth as pleasant even at low temperatures. From this follows that only low temperatures are necessary and thus electricity and heating costs are saved. Another advantage of infrared heating is that the rooms do not have to be preheated for a long time to keep the body pleasantly warm. This provides comfortable warmth and thus increases well-being and health.

Heating Technology: Circulation Pump, Combined Heat and Power & Condensing Technology

Owners of buildings or real estate meet with searches for heating systems again and again the same technical terms. So what is really behind terms such as combined heat and power or condensing boiler technology and how important are these for the new heating system?

Heating pump – the heart of central heating

Probably the most important element of a common central heating system is the heating pump, also called circulation pump. It works in the basement and ensures that there is always enough warm water to the radiators, thus enabling heating. However, the willingness to perform, especially in older models, results in unnecessarily high energy consumption and the resulting high energy costs. Therefore, it makes sense to replace older models, as they are usually oversized and always provide high performance, even when this is not necessary. The older models do not adapt to the actual demand and therefore often work unnecessarily at full speed even in summer. New models have a stepwise or automatic regulation and therefore only work at full power when it is really needed. This reduces costs enormously and energy consumption is not unnecessarily high.

Heating pump to be replaced: drain

But when is it necessary to replace a heating pump? This is easy to find out by following these tips:

• Calculate how many watts you use and compare this value with the power value of your existing pump. Calculate about 1-2 Watt per radiator. A household with 10 radiators therefore needs a heat pump with the power of about 20 watts. If the achievement value of your heat pump lies clearly over the value, you should think about an investment into a new heat pump.
• Check the energy class of your heat pump. The higher the energy class, the lower the power consumption and the higher the energy saving potential. A class A heat pump is optimal, as it works most efficiently.
• Look for a specialized company and get individual advice on whether the installation of a new heating pump makes sense for your real estate.

Cogeneration: Efficient use of energy

In general, the term cogeneration is used to describe the generation of energy, i.e. electricity by combustion, whereby the waste heat is used for heating purposes. The kinetic energy generated to drive a generator is used to generate electricity. The available waste heat is then supplied to heating systems. This waste heat is so great in large plants, such as industrial plants, that entire districts but also public buildings, such as hospitals, can be supplied with it. The parallel generation of electrical and thermal energy makes enormous economic sense, as otherwise much energy remains unused.

The technology has been minimized enormously over the last years. Where large machines were needed in the past, there are now CHP plants that are compactly combined in a box and produce the same output. Meanwhile, there are also systems for multi-family houses, which can generate outputs of about 4kW of electrical and 20kW of thermal energy and are relatively small. The technology is thus becoming increasingly compatible and individually applicable in many different areas.

Condensing technology: utilization of condensation heat

Condensing technology uses the temperatures of the exhaust gas to preheat the combustion air. A pipe-in-pipe flue gas system heats the cold outside air through the flue gas. The exhaust gas then cools down to the outside temperature. The flue gas must pass a very large heat transfer surface and in doing so releases the heat to the lowest possible system temperatures of the heating system. Since these are very low, the water content in the exhaust gas condenses and the condensation heat is used. Condensing technology therefore mainly describes the process by which the heat of condensation is used.

In order for the condensation to function under all conditions, low heating system temperatures are necessary, which are created by large heat transfer surfaces. Panel heating systems such as floor, ceiling and wall heating systems are therefore particularly popular.

Radiators: Models, Functions & Correct Ventilation

Radiators ensure that the heat produced can reach the various rooms in the building and be controlled there. There are not only different models of radiators, but also some things you should know about them.

Floor Heating: cuddly warm feet

The underfloor heating is one of the panel heating systems. A distinction is made between warm water heating systems (wet and dry systems) and electrical systems. Hot water underfloor heating systems are installed invisibly in the floor surface. The pipes are therefore laid directly in or under the screed. Electric underfloor heating consists of a mat or net in which heating cables are integrated. This is laid under the floor covering and heats the floor from there.

In terms of price, the cost of underfloor heating varies depending on the system. In the case of a dry system, the cost is 28-44 euros per square meter. Additional costs for other materials and installation are also included. A wet system costs between 13-40 euros per square meter, depending on the type of installation. Here, too, there are additional costs for additional installation materials. The electrical systems can be installed from 24 euros per square meter. The prices vary depending on the floor area. The larger the surface, i.e. the surface, the lower the price per square meter.

Wall & ceiling heating: invisible radiators

The wall and ceiling heating systems are also among the panel heating systems. They are installed under the wall or ceiling and initially only heat the wall/ceiling. The heat is then transferred to the room by thermal radiation. Heat dissipation by convection is almost non-existent here and the movement of the air is largely eliminated.

In most cases, a simple central heating system is the source of the heat, because it pumps the warm water through the pipes under the wall/ceiling. However, this heating system can also be combined with renewable energies and condensing boilers. The panel heating system manages here without any problems with supply temperatures of around 30° C. A prerequisite for the efficient use of this radiator, however, is good insulation, as otherwise too much thermal energy is lost.

Simply vent the radiator: drain

Each heater should be vented regularly. This helps to avoid annoying noises and allows the heater to develop its full performance. Trapped air in the heater reduces the performance of the heater and leads to higher energy consumption. This air must therefore be vented regularly. Signs that the heater needs to be vented are for example strange noises like a bubbling or a gurgling sound coming from the radiator but also that the heater does not get completely warm but only around the region of the water inlet.

Before the heater is vented, the water pressure must be checked. This should be within the marked normal range, otherwise water must be topped up to restore the pressure. After each new filling of the heater with water, the heater must be vented. For this purpose all thermostats should be closed and the valve should be searched for. This is usually located at the opposite upper end of the radiator and looks either like a small square pin or a pentagonal screw. Depending on which valve is present, venting must be done with a venting wrench or pliers.

The most common valve is the square spindle, which can be vented with a vent wrench. To do this, the valve must be opened until the air escapes hissing. It is important not to open the valve too far, otherwise it could fall out. If all excess air has escaped, water will start to escape from the valve. From this moment the valve should be closed again quickly. It is best to catch escaping water with a container.

Fireplace and Stove: Heating with Comfort

Also a chimney oven offers the possibility to save heating costs or even to heat the whole building. A fire-place with wood or pellets to heat, brings however by far more advantages than only the saving of heating costs. The burning of wood is CO2-neutral and thus very pollution free. Whether the choice falls now on a chimney oven or on a tiled stove, is here rather a matter of taste.

Fire-place in modern free-hold apartment (Berlin):

Fireplace integration country house (Mallorca)

An ordinary wood-burning stove consists of a steel body with a combustion chamber and a correspondingly required flue gas pipe. The flue gas pipe directs the flue gas products produced during combustion to the outside. The firebox is closed with a fireproof glass door to minimize the danger of an open fire in the living room. Fireplace stoves are offered in many different designs and models and can be individually adapted to the room by the owner. Besides the practical function of saving heating costs, the fireplace also has a cosy and aesthetic effect.

Firewood: Do-it-yourself, shredding & stacking

Kaminholz & Kaminholzlagerung – Larger quantities of firewood, are often stored on properties. The garden or a barn are often used for storage. Larger quantities of firewood, once stored on a property, must be stored in a fire protected place. This measure is regularly checked by a chimney sweep. In this article you will find tips and videos about storage, DIY, stacking and chopping firewood for your fireplace:

The three phases of building saving: saving, repayment and loan phase

Each building saving consists of different phases. In most cases there are three different phases that have to be passed through. First a certain amount is saved, then the loan is allocated and finally repaid. But how exactly do these phases work and which key figures have to be determined during the respective phases?

Tip: More about the topic Credit & Financing

The Most Important at a Glance

• In the saving phase, a certain amount is saved. This amount depends on the volume of the building savings contract
• If the minimum amount is saved, the loan can be paid out. There are several options that can be taken during the allocation phase
• In the loan phase, the loan is repaid with monthly payments. The repayment period depends on various factors, such as the loan amount
• Building savings operate with the help of payers and payees who provide cash flow and earn the same from interest
• Different building savings offer different tariffs for building savers. The comparison of the building saving accounts is worthwhile due to the different offers for each building savinger

The Saving Phase – Save Money Until Allocation

In the saving phase, a certain amount is saved first. This usually corresponds to 30-50% of the volume of the building savings contract. For this purpose, the savings amount, the loan interest rate and the redemption amount must be determined. It is important to know in advance exactly how high the loan amount should be and to consider both the costs for the property and the existing equity capital. Only when this sum is completely saved, the contract is ready for allocation and the loan can be paid out. A building saving contract is also often started at a young age without having planned a concrete building project. Here the sums for the contract vary depending on the individual situation and financial situation.

• In the saving phase a certain amount is saved
• This amount depends on the volume of the building saving contract

The allotment phase – different possibilities for building savers

After the minimum valuation number has been saved, the contract is ready for allocation and the loan is paid out. The valuation figure regulates the fair distribution and the order of allocation, since all building savers of a building saving pay into the same pot. Therefore, only a certain amount of the loan can be paid out each month in order to keep the incoming and outgoing payments in balance. The allocation phase is reached after at least 18 months after the conclusion of the building saving contract. Here building savers then have two options. The credit balance and the state premiums can be paid out or the building saving loan can be used for home ownership. In the latter case, the building savingkasse will pay out both the savings and the loan, i.e. the entire building saving sum. Special payments can shorten the allocation phase and help you reach your goals faster.

• If the minimum amount is saved, the loan can be paid out
• There are several possibilities that can be perceived in this phase

The Loan Phase – Repayment of the Loan

If building savings loan customers decide to take out the loan and use it for home ownership, the building and loan association will pay out the saved credit balance and the loan, i.e. the entire building saving sum. The loan is then repaid in monthly interest and repayment instalments. The amount of the repayment installment is chosen by the building saving customer. The repayment period depends on the amount of the monthly repayment contribution, the selected loan interest rate and the loan amount and varies according to the building saving tariff.

• In the loan phase, the loan is repaid with monthly payments
• The repayment period depends on various factors, such as the loan amount

The Building Saving Contract – Different Variants, Uses and the Benefits

Building saving contracts are one of the most popular and widespread financial products. Mathematically, there will be around 27 million such contracts at the Bundesbank at the beginning of 2019, accounting for three quarters of German households. However, this does not mean that a building saving contract is the best solution for everyone. Moreover, there are very big differences between the rates of different building savings contracts. Exact information and the comparison between different offers helps to make the right decision.

The Most Important Facts at a Glance

• A building savings contract combines a savings plan with real estate financing and is divided into two phases, the savings phase and the repayment phase
• The building savings is meant as a long-term, supplementing financing in addition to a real estate financing
• The topic of building saving savings contains some technical terms that must be understood in order to acquire sufficient expertise. Some of these terms are, building savings collective, regular savings contribution or also building savings sum
• There are different variants of building savings, which are suitable for different scenarios. For this count the building saving fort financing, the savings contract and the insurance against rising building interest
• The tariffs of different building savings differ significantly. So it is definitely worthwhile comparing different offers
• Which building saving contract is the correct one, appendix of different key figures and the individual personal situation must be determined
• A building saving contract is usually only concluded for a relatively small amount and therefore works only in addition to the actual real estate financing
• Real estate financing is usually concluded with a bank and not with a building saving
• The money at building savings is insured by law up to an amount of 100,000 euros. As an additional security, the creditworthiness of the building saving accounts can be checked in advance

What is it and how does it Work? – the Most Important Basics on the Topic of Building Savings

A building savings contract combines a savings plan with real estate financing and is therefore divided into the savings phase and the repayment or loan phase. First, a building savings amount is determined and the percentage of the minimum savings amount. In the first phase, the consumer saves a certain amount of money, which is mostly 30-50% of the volume of the savings agreement. Once this amount has been saved, the contract is ready for allocation and the loan can be called. Thus, savers only receive the loan when the minimum savings amount has been reached. The loan is then paid out together with the money saved up to that point. The loan may be used however only for so-called residential purposes and not for example for the purchase of a car.

If the loan is disbursed, the second phase begins, the loan phase. Once the loan has been paid out, the loan is repaid to the building saving in monthly installments. Explained by an example: An agreed building saving sum is 60,000 euros and the minimum saving amount is 50 percent. The loan in the amount of 30,000 euros is therefore paid out when 30,000 euros have been saved in the savings phase. If the saver puts thus monthly approx. 300 euro back, the allocation maturity can be reached in less than nine years.

• A building society contract combines a savings plan with real estate financing
• Building saving is divided into two phases, the saving and the repayment phase
• The building society savings is meant as a long-term, supplementing financing in addition to a real estate financing

The Most Important Key Figures – Building Saving Collectives, Regular Savings Contribution and Much More

The topic of home loan and savings is very complex and therefore contains many terms that can cause confusion. In order to leave no questions open for you, we explain the most important terms in the topic of building saving savings!

The building saving sum

The building saving sum is the most important key figure in a building saving contract. It indicates the amount of the concluded sum, i.e. both the amount saved and the loan taken out later. When financing a property, the amount of the savings sum can be included.

The valuation figure

The valuation figure defines when the loan can be allocated to you. This number increases as the savings phase progresses. If the valuation figure exceeds the target valuation figure set by the building saving, the loan can be reduced. The higher the valuation number, the more money has been deposited, the lower the amount, and the shorter the term of the loan.

The building saving collective

building saving is based on the collective idea that people willing to save under building saving contracts join together to form a building saving community. This consists of payers, who save credit balances in contracts and of borrowers, who use these credit balances as loans. However the following problem can occur here: If there are too few savers, not all borrowers can access the appropriate credits.

The minimum savings balance

In order to be able to take advantage of the loan, a certain amount of money must be saved in advance. This sum is called the minimum savings balance and is usually between 30 and 50% of the volume of the building savings contract.

The regular savings contribution

In each building saving contract a so-called regular savings contribution is defined, which usually amounts to 4-5% of the savings sum and depends on the amount of the savings sum. The building saving customer thus reaches the minimum savings balance required for allocation after approximately six to seven years. Monthly special payments must be approved by the bank, but are possible in principle.

The terms emerge again and again with the topic building saving saving and must be understood first, before the topic can be concerned intensively. The terms are therefore all very important to acquire an intensive specialized knowledge about the topic.

• The topic of building saving savings contains some technical terms that must be understood in order to acquire sufficient specialist knowledge
• Some of these terms are, building savings collective, regular savings contribution or also building society sum

The Variants – Building Loan Continued Financing and Savings Agreement

In addition to the normal building saving contract, there are other variants of building saving contracts. The insurance against rising building interest is worthwhile itself for example, if the later real estate acquisition is firmly planned or however the building interest rises clearly.

With a building loan it can be besides meaningful to know the interest rate up to the last fixed rate. The associated variant is the building saving financing or also called combination loan. Here the building savings contract is combined with another loan. The variant is particularly suitable if the total effective interest rate is lower than a comparable annuity loan or if the borrower wants to finance immediately.

The last variant is the savings agreement, which describes the building saving contract as a pure savings product. Here the contracts lure with an interest bonus, if the customer does without the disbursement of the loan. This variant is worthwhile itself, if high interest is offered, the money is not needed and the savings rates can be kept exactly.

Finding the right contract – the different offers of the building savings

Different building savings sometimes have significantly different rates. A comparison in the search for the best building saving contract is therefore definitely advisable. When comparing different ratios must be considered, as for example the loan interest. But other factors are also important, such as the interest rate on the credit balance and other key points of the contract.

However, the comparison is not easy in any case, since different interest rates are combined with different savings and repayment periods. These key data must then be coordinated with the wishes and individual situation of the savers. Thus it may well be that an offer with a significantly higher loan interest rate is the better choice, since the time to allocation is shorter than with the other variants. Tip: Obtain different offers from different providers for a building saving sum and compare them with regard to the mentioned key figures. All important key figures at a glance:

• The loan interest rate
• Interest on the credit balance
• The savings and repayment period
• The individual wishes of the investor
• The costs of the building society for a contract
• The flexibility (special payments, extensions, …)
• Periods of notice
• The amount of the sum
• The percentage of the minimum savings

You should consider all these key figures when choosing the right contractual partner and compare the different tariffs intensively to find the one that fits your individual ideas and wishes.

• The tariffs of different building societies differ significantly
• Comparing different offers is therefore definitely worthwhile!

Building savings and real estate financing – a bank loan as additional financing

The sums of the building savings usually do not exceed the amount of 50,000 euros. However, this amount is not sufficient for the ultimate financing of a property. If the decision to buy or build a property is made, the further financing must be considered. This is possible with a bank as well as with building savings. However, a loan from a bank is often easier and more advantageous than the complicated models offered by building savings. Especially for larger loan amounts, banks are often the better contact partners. With banks, a short term financing is possible and the building saving contract can be used additionally.

Find out more about financing real estate with banks: Tips on Construction Financing!

The security – how safe your money is with the banks

In general, deposits at building savings are similarly secure as savings accounts at banks for overnight and fixed-term deposits. The credit balance is legally secured up to a value of 100,000 Euro. As an additional protection, we recommend checking the creditworthiness of building savings, using the ratings of the major agencies Moody’s, Fitch and Standard & Poor’s. These agencies issue ratings for banks and building savings and evaluate the creditworthiness of these. For overnight and term deposit accounts, only banks with a rating of at least “BBB” (Standard & Poor’s and Fitch) or “Baa” (Moody’s) should be considered. For building and loan associations, a rating of one of these agencies is sufficient, as the ratings of building and loan associations are less common than those of banks. In addition, building saving accounts always have the option of passing on impending risks to the collective. If your bank or building saving meets the criteria, you can be sure that your money is safe.

• The money at building savings is insured by law up to an amount of 100,000 Euro
• As an additional security, the creditworthiness of building savings can be checked in advance

The Deal: Facts About Building Savings and the Contract

In addition to the three phases of building saving, other key figures are also important! These include the general understanding of the function of a building saving or important key figures of the building saving contract.

The building saving accounts – the principle, the individual parts and the most important facts

Building savings have specialized in the allocation of building saving contracts. There are different parts that work together and thus make the principle of building savings work. The three phases play an important role here. building saving accounts always have depositors and payers. The payers, who during the savings phase pay in so-called savings installments and the payers, who during the loan phase repay the building saving loan.

The payers are those in the allotment phase, who both receive their saved assets and can draw the loan. The money in a building savingkasse therefore flows back and forth from the payers to the payers. The building savingkasse itself earns its money with interest, which the building saving customers pay in different phases.

The building savings contract – Various offers from building savings collectives

Different building savings sometimes have significantly different rates. A comparison in the search for the best building saving contract is therefore definitely advisable. When comparing different ratios must be considered, as for example the loan interest. But other factors are also important, such as the interest rate on the credit balance and other key points of the contract.

However, the comparison is not easy in any case, since different interest rates are combined with different savings and repayment periods. These key data must then be coordinated with the wishes and individual situation of the savers. Thus it may well be that an offer with a significantly higher loan interest rate is the better choice, since the time to allocation is shorter than with the other variants. Tip: Obtain different offers from different providers for a building saving sum and compare them with regard to the mentioned key figures.

• Different building savings collectives offer different tariffs for building savers
• The comparison of the building savings collectives is worthwhile due to the different offers for each building savings collective

The Conclusion – Funding Opportunities, Costs and Advantages and Disadvantages

However, building saving savings offers more than the building saving contract and the general conditions. For example, building saving contracts are intensively promoted by the state. In addition, costs are incurred when concluding a building saving contract, which vary from bank to bank. Before a contract is concluded, other key figures must therefore be observed and checked. In addition, we will give you an overview of the advantages and disadvantages of a building saving contract.

All important information at a glance

• The state supports building savings through various subsidies. Depending on the situation, the subsidy options can help to access the loan earlier or to pay it off faster
• In addition to the interest on the loan, other costs are incurred with the building savings contract, such as the acquisition and account management fee, which vary from bank to bank
• Building savings is not suitable for everyone and therefore offers many advantages and disadvantages
• On the one hand, building savings offers a great deal of security and can be planned, but is not suitable for short-term real estate financing, for example

The subsidy possibilities – saving is subsidized by the state

There are various subsidies for building saving savers from which they can benefit. These depend on the saver’s income and whether or not the employer participates in the savings agreement for capital-forming benefits. The subsidies come from the state and can help to get the loan paid out more quickly or to repay it more quickly. We have summarized the most important subsidy possibilities and explained them for you:

The capital-forming benefits

Capital-forming benefits can be applied for by employees, civil servants, judges, trainees and by soldiers by the boss. These amount to a maximum of 40 euros per month. The payment is a voluntary decision by the employer and therefore does not have to be approved. However, if they are offered, they are directly recorded in the contract.

The employee savings bonus

If capital-forming benefits are used for the building savings contract and the saver’s taxed income is a maximum of 17,900 Euros or 35,800 Euros for married people, an annual allowance of 43 Euros or 86 Euros can be claimed from the state via the income tax return. However, this employee savings bonus is only paid if the building saving loan is used for residential purposes.

The housing construction bonus

This premium will only be paid out if the building saving contract is used for residential purposes and the taxable income does not exceed 25,600 Euros or 51,200 Euros for married couples. As a further condition, at least 50 euros must flow into the contract annually. The amount of this premium is 8.8 percent of the annual payments and has a maximum value of 45 euros or 90 euros for married persons.

The residential subsidy

In order to receive the residential subsidy from the state, the savings sum may only be used for the construction or purchase of owner-occupied property or for conversions suitable for the elderly. In addition, the saver must have statutory pension insurance. The amount is 175 euros per year, if the saver pays at least four percent of the previous year’s gross income into the savings agreement. For each child entitled to child benefit, an additional amount of up to 300 euros flows into the contract.

The allowances flow both in the savings and loan phase and ensure that the building saving contract is ready for allocation earlier or can be paid off more quickly. Before using one of the mentioned subsidy possibilities, however, the tax aspects should be considered and discussed with an expert.

• The building savings is supported by the state through various subsidies
• Depending on the situation, the funding opportunities can help to access the loan earlier or pay it off faster

The costs – closing and account management fees vary from bank to bank

For a building loan agreement, there are other costs in addition to the loan interest, such as the closing and account management fee. The closing fees are a percentage of the amount of the savings amount, while the account management fee varies from bank to bank. Since the costs vary from bank to bank, they should be compared in advance and taken into account in the decision. The costs are therefore another important factor that must be considered when comparing different rates. Tip: According to the German Federal Supreme Court, account management fees are only permissible in the savings phase, as the additional costs for customers in the loan phase in 2017 were declared inadmissible. Please bear this in mind when choosing a building saving.

• In addition to the interest on the loan, there are other costs associated with the building savings contract
• The costs include the closing and account management fee, which varies from bank to bank

For whom is it worthwhile? – Decision-making aid building saving contract

A building saving contract is not the right choice for everyone. Especially for people who are looking for short-term real estate financing, the building saving contract is not suitable because the money is only available after the end of the savings phase. For whom a building saving contract is worthwhile itself and which advantages this offers you experience now:

• The building savings can be planned and determines when money is available for the financing of construction, purchase, conversion or modernization measures
• The building savings is suitable for people who are looking for security in the long run
• 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 savers despite the ability to plan
• Special payments are possible at any time
• The saver has limited freedom as to when the building saving sum can be used
• The financial means are available to the saver when he needs them
• The loan interest rates for building society contracts are usually very low

For whom a building saving contract is not worthwhile and which disadvantages such a binding can have:

• The building savings contracts are usually only for small amounts, so that the bausparkassen can secure the favorable interest
• The building society is not suitable for a short term real estate financing
• The repayment rates demanded by the building societies are comparatively high
• A building savings contract is not suitable for the financing of an entire real estate, but only as additional financing sum
• Fees at the time of contract conclusion are relatively high for building societies
• There is no absolute planning security, since the time of payment depends on the savings portion

Depending on the situation, the advantages and disadvantages make a building saving contract very attractive for the saver, while in other situations saving with a building saving does not offer a sensible alternative. Which choice is the best for you has to be determined according to the individual situation and cannot be answered in a generalized way.

All Questions About Building Saving

The topic of building saving savings is very complex. Therefore it is important to have some expertise and to be well informed before signing such a long-term contract. The experts from Lukinski will answer the most important questions about saving for building purposes, so that no ambiguities remain for you.

What is meant by a building saving contract?

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

How long does one pay into a building savings contract ?

A term is agreed upon in the building saving contract, which is however usually adjustable at any time. Often a minimum term of 18 months is agreed upon and the term is limited to a maximum of 20 years. How long it is finally deposited depends on the sum and the redemption amount.

What does a building saving contract cost me?

The cost of the building savings contract varies from bank to bank. In addition to the costs for the interest on the loan, there are also costs for the closing and account management fee. These costs are an important key figure to compare different tariffs.

Can you transfer a building saving contract?

Yes, a building savings 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, whether a transfer is possible in your contract must be agreed with the building saving in advance.

How can I have my building saving contract paid out?

A building savings contract can theoretically be paid out at any time. However, the payout depends on the respective phase in which the investor is in. In the loan phase, the amount is automatically paid out 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 the regular savings contribution?

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

What is the taxable income?

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