How does building savings actually work??

Written by olaf varlemann – managing director baufi-nord gmbh.

In view of the recently strongly risen interest bausparen experiences straight a renaissance. Many consumers wonder whether they should secure favorable interest rates for the future with a bauspar contract now. This can make perfect sense, but, as always in life, it all comes down to the finer points. First of all, one should know how building savings works at all. The basic principle of building savings is actually quite simple.

Building savings simply explained shutterstock 757649455

Many people roll their eyes when they hear the word building savings. A building society contract is considered by many to be the epitome of bourgeoisie and boredom. At the same time, the idea of building savings in the early days was a thoroughly revolutionary financial product. However, that was a good 400 years ago. Thanks to the low interest rates for real estate financing, building savings have "somewhat" gone out of fashion. But since interest rates on real estate loans from banks have skyrocketed, home savings is just about to make a comeback.

The basic principle of building savings is simple. Behind this is the so-called. Solidarity principle, in which several people with the same or. Similar goal together. You should know that building savings was invented at a time when there were no banks that financed real estate "for everyone". You had to think of something else.

Just imagine that you want to buy a house "someday". This house costs 100.000 euros. The money for it you must save together yourselves (bank credits do not exist)!). You can spend every year 10.000 euros set aside. After 10 years you have the money together and can buy your house. And just like you, everyone who wants to buy a property at some point does this.

But it has to happen faster?!

Imagine now that you join forces with 9 other people, who also want to buy a house for 100.000 euros and also want to spend 10 euros every year.000 euros can save for it. But instead of everyone "saving" on their own as usual, they pay the money into a common (savings) pot. After one year in this pot are 100.000 euros! Now all savers have to draw a lot. Whoever draws the winning ticket gets the 100.000 euros allotted. That is why even today we speak of allocation.

The first lucky saver gets after one year from the common pot the 10.000 euros, which he has paid in himself. In addition, he gets the remaining 90.000 euros as a loan. This 90.000 must then be paid back to the community over the next 9 years (i.E. He continues to pay the 10.000 euros per year into the bauspar pot).

In the second year, it's the turn of the second home loan saver. This gets from the pot the 20.000 euros that he has saved himself plus 80.000 euros as a loan. This loan must then likewise with annually 10.000 euros back and is debt-free after 8 years.

The whole thing repeats itself every year and then after 10 years even the last home saver can buy his cottage. However, he no longer needs a loan for this, because he has the 100 CHF.000 euros into the common savings pot yourself.

Because all savers fear that they will have to wait 10 years for their house, they start looking for other savers. And in fact they convince more and more people of the building society principle. New home loan and savings institutions are being added all the time.

Because with the time however evenly more and more building savers come in addition and not all 100.000 euros or 10.000 euros a year to pay in, but sometimes more and sometimes less, one had to organize the whole thing differently.

The building savings sum!

Today every saver can set his own target amount. This is what one does with the conclusion of the building society contract. The sog. Building savings amount is the total amount of money you want to have available in the future (see above the 100.000 euro). The building savings sum consists of the saved credit and the later loan (therefore building savings sum ).

Evaluation number instead of lottery!

With so many home savings customers, the initial idea of drawing lots was no longer practical. So they had to think of something else to make it as fair as possible for everyone. Instead of the lottery procedure, a kind of school grading system has been created. These notes still determine who gets their money and when. The grade is mainly used to evaluate who has paid into the savings pot, for how long and how much. Thus the so-called. Valuation number invented. In order to get the loan from the bausparkasse, you have to reach a certain score (the so-called "score"). Minimum valuation figure). Once you have achieved, you can decide whether to take the loan immediately or later.

Minimum deposits?!

Anyone who wants to take up the loan from the building society at some point must first pay into the pot themselves for a certain time. While home loan no. 1 (see above) got the money after just one year and only had to pay in 10% of the target amount, the other savers in the bauspar community would have had to pay in more and for longer. In practice, it has been found that it makes the most sense for home loan savers to pay in around 40% of the target amount (home loan sum) themselves and then get a loan of around 60% of the home loan amount.

Interest rates and fees?!

While a mini-building savings bank with 10 members is still quite manageable and does not need any administration, it looks quite different with many thousands of building savers. It takes people to manage the money collected or to ensure that everyone pays their interest and redemption installments on time. And it also needs people who always "bring in" new bauspar customers.

The whole administration was financed from now on by an interest surcharge. This means that the interest paid by the borrowers does not end up one-to-one with the other building savers. A part of it is used to pay for the administration. In the case of the sales representatives of the bauspar savings bank, who were to "attract" new customers, a different approach had to be taken. Sales representatives in all kinds of industries were used to receiving a commission when a deal was closed. This system was adopted by the bausparkassen. But how to pay these commissions??

The bausparkassen could not pay the commissions through the interest on the loan. Reason: at the time of signing the contract, it is not yet clear how much loan the saver will take. So they came up with something else. So that all representatives can be paid immediately and all also get the same amount of money for a conclusion, one simply introduced a fee. This sog. The acquisition fee is based on the building savings sum and usually amounts to 1% of the building savings sum.


Over time, the bausparkassen have discovered that – contrary to the original idea of bauspar – not all people can be lumped together in a single pot. There were people who could save comparatively large amounts and those who wanted to repay their loans faster than usual. Others needed longer to pay in the minimum balance and wanted a longer loan term so that the installments would not be too high. And still others have seen the building savings only as a savings contract and did not want a loan at all.

In order to be able to satisfy as many wishes as possible, the one large pot was divided into several pots with different general conditions. But since "pots" sounds kind of funny, these tariffs have been called.

Pre-financing and interim financing?!

With building savings it is like in real life: sometimes things can happen unexpectedly. There it also happens that you find your dream property, but the building savings contract (and thus the loan) is not yet ready for allocation. This can be.B. Because the minimum balance had not yet been paid in or the valuation figure was too low.

In that case, the bauspar contract can be prepaid by a bank, or. Interim financing. A loan is taken out, which is paid back in one sum after the allocation of the building society contract. From that point on, of course, you have to repay the bauspar loan. The whole thing works even if you don't have a building savings contract yet and take out a new one.

Not all bausparkassen are the same!

In the beginning, the various bausparkassen did not really differ from each other. That with the minimum balance, the acquisition fee, etc. Was standard with all. But some bausparkassen have tried other ways in the course of time and varied their offer a little bit. For example, one building society has lowered the minimum balance from 40% to 20% and the other building society has offered extra low interest rates to the savers who repay their loan quickly. Thus, the different bausparkassen have created different tariffs depending on the target group and their wishes.

A few basic principles apply to all bausparkassen!

Bausparkassen are subject to certain rules and laws. An important law says that building societies cannot promise savers a fixed date at which they will get the loan. This is logical, because this allotment date depends, among other things, on how much the bauspar customers pay into the various pots in total. Instead of a fixed commitment, there is therefore only a calculation and projection. However, the building societies usually do this "with enough air and buffer". But there have been times and building society where the calculated allocation dates could not be met. There was something going on!

You don't get the home loan just like that when it's allotted. Before a building society grants a loan, it naturally looks to see whether the saver is able to repay the loan. In this way, building and loan associations are no different from banks. The bauspar loan is therefore only available after an appropriate credit check. The basic rule is: if the bausparkasse allows it, you can take out a bauspar loan, but you are not entitled to it.

Is building savings worth it??

Until the end of last year, building savings only paid off in certain situations. This was due to the generally low interest rates on real estate financing. The bausparkassen could not keep up with their usually higher interest rates on loans. The tide has turned in the meantime. With a building savings contract, I can secure significantly lower interest rates today than you would currently pay at banks. However, one should be reasonably quick, because the building societies are likely to increase their interest rates for building loans soon as well.

We are happy to advise you!

As independent building finance consultants, we are not tied to specific building societies and have a pretty good overview of the market. From the multitude of bausparkassen and bauspar tariffs, we will certainly find the right offer for you. Of course, this applies only in the case that bauspar is a suitable means of financing in your current situation.