Building savings contract and Wohnriester - Where is the catch here?

  • Erstellt am 2018-03-02 10:01:21

HilfeHilfe

2018-03-03 12:48:17
  • #1
I cannot imagine that such models are significantly cheaper than an annuity loan
 

PhiTh

2018-03-05 12:50:19
  • #2
Hello,
Your offer does not reflect what you think it reflects.
The 30 years may be the term of the loan agreement, but certainly not the fixed interest period. Intuitively, your interest rate will be adjusted after 10 years... Be really careful with that, especially with a lower income, it can quickly backfire.
As a reference point: we got an interest rate of 1.9% with 60% equity and an income of 4.6 times the installment with a 30-year FIXED INTEREST PERIOD, and that was already insanely good...
Not everything that glitters is gold, especially with the home savings contract. I really calculated everything exactly for us and a scenario with a home savings contract was always the most expensive option for us.
 

86bibo

2018-03-06 01:03:48
  • #3
We also had some conversations with a Wüstenrot representative, whom I would recommend at any time. They have some very interesting building savings contracts on offer that I hadn't seen/received from the competition. However, this only worked with a certain down payment (I’m not sure anymore if it was 10% or 20%). The downside was the quite high rate and little flexibility. I really thought about whether we should do it, but in the end it was too risky for me since we don't have children yet and can't estimate the burden afterwards.

Basically: A building savings contract always has a certain amount until it is eligible for allocation. Only when this amount is reached do you get the loan. Until then, you need a loan if you want to buy/build beforehand. This is a so-called repayment suspension, where you pay the interest until the building savings contract is allocated. Afterwards, it is replaced by the building loan. The effective interest rate for the building savings contract is therefore significantly higher than for an annuity loan, because until allocation you do not repay a single cent, so the interest does not decrease. For example, if you first have to save 40% and conclude the repayment suspension at 2.5%, then the 1.25% loan interest of the building savings contract is of no benefit to you, since you initially pay quite a lot of interest on the full amount for about 15 years.

At €100,000 and let’s say 2.5% over 15 years, that is €2,500 interest per year (€200 monthly). To reach, for example, 40% after the 15 years – all fictitious values, since you don’t have the exact data – you have to save €222 monthly. At 30% it’s still €166. The Riester subsidy lowers that a bit (I don’t have the exact amount in mind, but it is something between €100 and €200 per year without children), but it’s not a game changer. The loan amount can of course be scaled arbitrarily; this was the easiest way to calculate.

On the remaining amount, you then pay the 1.25%. This can definitely be worthwhile, but only if you reach allocation in time; otherwise, it becomes expensive.

Therefore: find out what the minimum deposit, the allocation rate, and the interest on the repayment suspension are. Annual processing fees are also not insignificant, as they sometimes like to charge the wallet in Wohnriester.
 

86bibo

2018-03-06 01:14:20
  • #4


Your high equity ratio is of course not common. Personally, I would probably have chosen a high installment to be done after 20 years; a percentage well below 1.5 would have been possible. But as always, it is very individual.

The home savings contract is almost always more expensive because you buy yourself interest rate security. That costs, and indirectly you are speculating on rising interest rates or hedging against them. We have a combination of annuity loan and home savings contract, but only because through the home savings contract we got a significantly better interest rate on the annuity loan. In addition, the home savings contract also has quite decent conditions and requires only 30% for allocation.

In addition, this way you are somewhat more flexible. If interest rates rise, then I put the special repayment into the annuity loan; if they remain relatively low, I put the money into the home savings contract.
 

PhiTh

2018-03-06 09:40:34
  • #5


Yes, it is certainly not usual. For 20 years that would have been around 1.7 to 1.8%, which was also the reason why we ultimately decided on a 30-year fixed interest period. Otherwise, we can make special repayments and even have the option to get the special repayments paid out again. That is quite attractive to us because we will probably first make larger special repayments and if the interest rate turns someday or we want to invest elsewhere, we can reap the benefits from the loan...

The biggest hidden disadvantage of the building savings contract, as already mentioned, is that you pay interest on an annuity loan for the money you invest interest-free in the building savings contract to reach the allocation amount. Thus, the effective interest rate is significantly worse than what the banks openly state as interest rates. We had a configuration with a 10-year loan which was then redeemed by the building savings contract with 1.3% (loan) and 1.36% building savings contract interest. The effective interest rate stated in the fine print for this overall configuration was 1.78% and was significantly more expensive than an annuity loan with the same term.
 

86bibo

2018-03-06 09:53:17
  • #6
With the building savings contract, you always have to compare it with an annuity loan that runs over the entire term, usually 30 years. Normally, you get extremely bad interest rates here. Often, they didn’t even want to offer us this because the period is too long. Others had surcharges of 1% or more compared to 20 years. Therefore, we made a different decision. We have full interest rate security on 50% of the amount, the annuities are almost paid off after 15 years, and only a KFW loan of €50,000 remains, which must be refinanced after 10 years. The bank unfortunately uses the existing loan to get the rest of the conditions. If they had offered us the interest rate for the annuity loan over the entire amount for 15 years, it wouldn’t have become a building savings contract.
 

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