Are we bound by the Wohnriester and building savings contract?

Hello,

I hope this topic fits here.

In 2013, we bought a house and among other things, the following products were recommended to us:

A Wohnriester with which we save a monthly amount to accumulate €25,000 with subsidies and interest in just under 11 years and a few months.

Furthermore, there is a building savings contract (Bausparvertrag) worth €50,000 that we received in advance for the house. This will then be redeemed with the Wohnriester after the 11 years, so that we pay off the remaining €25,000 in the building savings contract.

We pay interest monthly on the €50,000 building savings contract, no repayment is made because we save in the Wohnriester in advance, which then goes to the building savings contract.

The interest rate back then was about 2.3%, which was quite okay at the time.

After consulting with my bank (Sparkasse), I was assured that I could even pay into the Wohnriester or the building savings contract. Unfortunately, the conversation at that time did not develop so that my questions were answered, but rather I was offered a range of products.

Maybe someone also took out something like this back then and can help me whether we can get out of this contract earlier or if there is an advantage to paying in something. For example, what would happen if we paid the €25,000 completely into the Wohnriester, then the building savings contract would have to be due immediately, right?

Are we bound to the building savings contract or the Wohnriester or could we somehow free ourselves from it to at least use part of our loan with currently low interest rates?

Thanks and best regards

That probably doesn't work with the Riester. But building society savings contracts always have an unlimited right to special repayment, don't they? K

In your post, quite a few things are mixed up, which suggests that you haven’t understood the entire construct. You probably took out a loan of €50,000? Without interest and repayment? This loan is then paid off after 11 years by a mature building savings contract? With a maximum annual payment of €2,100 into a Riester contract, you do not receive €25,000 after 11 years per person.

Such constructs were also offered to us by our house bank. What deterred us about Wohnriester was that we would have to pay taxes on it later in retirement. However, they could not tell us how high these would be.

Your post is quite mixed up, which suggests that you haven't understood the whole concept. You probably took out a loan of €50,000? Without interest and repayment? This loan is then repaid after 11 years through a building savings contract ready for allocation? With a maximum annual contribution of €2100 into a Riester contract, you don't get €25,000 after 11 years per person.

Hello, yes, that sums it up quite well...

Such constructions were also offered to us by our house bank.
What put us off about Wohnriester was that we would have to pay taxes on it later in retirement.
However, they could not tell us how high these taxes would be.

Yes, we were aware of that and it's okay; at the time the concept wasn't so bad, but now the building savings contract is a thorn in the side because of the interest rate :-(