Is the building society loan the right one for you?
Building society savings works on the principle of solidarity: Many savers pay in one pot. If there is enough money in the cash register and the home saver has paid in a predetermined minimum balance, he will then be entitled to a low-interest home savings loan. The prerequisite for the loan: The contract must be ready for allocation. This is the case when a so-called target rating number is reached, which is calculated from the amount saved and the duration of the saving period. The building society loan gives the builder back the capital plus interest saved. Then he gradually repays his loan.
Low-interest rates, but cheaper credit
Building society savers have to be satisfied with relatively low savings rates of usually only 0.5 to 1.5 percent, but building societies already guarantee them a cheap building society loan for the future – regardless of how interest rates on the capital market will develop in the coming years, The building society savers already know the amount of the future loan interest when the contract is concluded. This means he can reliably calculate even over a long period of time. If mortgage interest rates rise, home savers have an advantage: they have already secured the low-interest rates for the entire financing beforehand. However, if mortgage interest rates fall significantly, this setting can also be disadvantageous compared to other forms of credit.
It is possible to start a home savings contract at any time: home savers do not have to have money on the high edge when saving starts. In theory, you can even sign a contract at the age of 16 and realize your dream of owning your home earlier than others with regular savings.
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Not for the spontaneous
However, a home savings contract only makes sense for those who want to build or buy a residential property in a few years. Such a contract can also be used for long-term planned modernizations, repairs or repairs. If, on the other hand, you want to buy a house quickly and have saved enough equity, you should better use a bank loan or think about a time-saving, but a somewhat more expensive variant of building savings: immediate financing via the building society loan. Here you can get your credit faster, but then have to pay it off at higher rates.
Most home savers choose classic home savings. This is divided into three phases: the savings phase, the phase of allocation and payment of the home loan, and the credit phase.
Minimum savings – save half
As a rule, customers must first save a “minimum balance” of 40 to 50 percent of the home savings sum before they receive a home loan from the building society over the remaining amount. The monthly saving is usually three to ten per mille of the agreed home savings sum – at 50,000 dollars between 150 and 500 dollars. The order in which savers receive the loan depends on their respective valuation numbers. This is calculated by the building societies, among other things, based on the credit balance and the waiting time for the loan. If the valuation number exceeds the minimum valuation number set by the building society, the building society loan is ready for allocation and can be paid out to the building society savers together with the saved building society savings.