Building savings loan with building savings contract

Were you at a bank or with intermediaries? Some banks only lend up to a certain loan-to-value ratio, and otherwise building society savings come into play. Other banks handle this differently. If you haven't done so yet, definitely go to an intermediary.

So the bank wants a security.

I assume it is your house bank? Go for a free consultation to „Dr. Klein“ or another independent advisor. They usually see more possibilities in their current database. They will also take care of everything.

This is a Sparkasse. I was also at the broker a few weeks ago regarding another house. There you can also get a loan, but the missing amount for the incidental costs is covered with a private loan with interest over 6%.

This is a savings bank. I also visited the intermediary a few weeks ago regarding another house. You can get a loan there as well, but the missing amount for the additional costs is covered with a private loan with interest rates over 6%.

The interest rate ultimately does not matter if the total offer is cheaper.
The interest rate from home savers always looks great, but since no repayment takes place during the accumulation phase, you always pay the interest rate on the full loan.
This means that with the same interest rate, the home saver is always significantly more expensive. Therefore, always compare both options over the entire term.
In addition, the advantages of the home saver only arise over the term. But if, for example, you want to make special repayments, the term is reduced and the advantage of the home saver applies for a shorter time.

Okay. This is a really complicated situation. I agree with that is certainly the expert.

First, I’m going to take a look at what this means:
- The repayment of the building savings contract would be from Sept. 2036 to 2050, meaning it must become eligible for allocation by 2036.
- Currently, payments (minus the initial fee) of €50,335 as well as negligible interest (€297) are planned for this.
- According to what I found on the internet, it would actually be eligible for allocation at that time (only 35% of the building savings amount is necessary). One of the typical traps with building savings contracts luckily does not apply here!
- Major risk from my perspective: the building savings contract calculates itself too low. The real monthly savings rate is not €215, but €425. Please note this carefully: if €425 cannot be paid in every month here, it will not become eligible for allocation! (The list hides annual special payments of €2,500. The repayment rate starting in 2036 would then also be €750.)
- Additionally, I see here an annuity loan of €230,000, repayment €1,100 per month.
- Additionally, there is a deferred annuity loan of €100,000, deferred, interest €434 per month.

I suspect the construct is supposed to be like this, and that’s why this is complicated. Please correct me if something else is planned.
- The house is supposed to be financed with two loans. One regular annuity loan that is repaid.
- One deferred annuity loan (where only the interest is paid). This is then settled starting in 2036 and replaced by the building savings contract.
If I am right here, your current payment would consist of:
- Repayment Loan 1: €1,100
- Interest Loan 2: €434
- Building savings rate: €425

Total: €1,959/month.

As soon as October 2036 comes, the interest for Loan 2 and the building savings rate would disappear, and instead the building savings contract would be repaid with €750.

Is that correct?

If so, you would have to ask yourselves whether you can afford the amount of the three payments.
Please watch out for the trap that sometimes advisors calculate the building savings amounts too low and you then don’t get them eligible for allocation.

Building savings contracts generally have a huge disadvantage:
Nothing is repaid for a long time. The money going into the building savings contract until 2036 could already have reduced the loan amount in an annuity loan during that time and thereby lowered the interest burden.

Example calculation with 4.5% interest (in the offer for the €100,000 it is only 3.75, as far as I can see):
At the beginning, the interest payments per month on the €100,000 loan are about €434. Adding the €425 building savings amount here and rounding up to €850 (but I’m too lazy to calculate exactly). Note: in this example calculation the interest rates are assumed higher!
By September 2036, only about €75 interest would have to be paid monthly due to the repayment, and already about €80,000 of the sum repaid (in comparison: in the building saver at that time it would be just over €50,000). The total amount would, assuming the interest rate stays the same, be paid off as an annuity loan after 13 years.
With the building savings (however: lower repayment starting in 2036; only €750 instead of €850; until 2036 the repayment would be identical) only after 24.5 years.

This once for orientation.

I believe – but please go to a financier for this – an annuity loan would be cheaper here, even if the interest rate rises slightly because of it (the €230,000 already has 4.29%, which is why I calculated a bit pessimistically above).

The big question will be anyway: Can you manage the payment?

Can you explain the plan of Sparkasse?

I see a loan of 230,000€ at 4.29%, which triggers payments amounting to 426,568.50€. (annual 13,200€) I see the L-Bank loan of 100,000€ at 3.75%, which triggers payments amounting to 181,210€. (annual 5,214€) In addition, the building savings contract of 150,000€, which is saved up to 55,135€ by 2035 (annual 5,080€), resulting in a building savings loan of 97,300€. In addition, the repayment of the building savings loan of 97,300€ from 2035 with payments of 121,008.83€ (annual 9,000€)

What loan is the building saver of 150,000€ replacing in 2035? What is your monthly burden until 2035 and from 2036 onwards?