Operation, interest rates and comparison of building savings
In Germany, there are about 20 million Basapas contracts, the importance of this form of investment and financing, contrary to some doom calls does not decrease. This is due to the construction itself and the state subsidies. Tariffs have become more flexible in recent years, more difficult to compare, yet highly attractive from a certain point of view.
- A home savings contract consists of a savings part and a building society loan.
- The home savings loan can only be disbursed when it is ready for assignment and can only be used for residential purposes.
- Building societies offer many different tariffs. A comparison is worthwhile to find the right tariff suitable for Basapas project.
- With the use of a home savings contract state subsidies can be used.
Building savings: the basic principle
It is simply explained in principle, in practice, equipped with many interesting variants: The saver saves at a fixed rate a certain amount, this Ansparphase takes about seven to ten years.
Then the Basapasvertrag “ripened”, the saver can take out a building loan from the building society, whose interest had been negotiated at the beginning of the contract.
He can also withdraw the accumulated sum, but loses granted funding, and he can convert it into a normal fixed-rate savings contract.
On the home savings loan he has a hereditary legal claim, and that is the real purpose of Basapas contract, which is promoted even in this form state.
A sum was saved, which serves as a down payment for the acquisition of residential property. Of course, any saver who at some point would like to buy or build homeownership could save money on a time deposit account, but few people can handle that.
By means of the contractual construction of the Basapas contract, including state support, they are motivated to “persevere” and rewarded by financial advantages. The state subsidy consists of capital-building benefits via the employee savings bonus and the housing premium.
Who is Basapas worth?
Anyone who wants to build seriously, should think about a home savings contract, especially for younger people, he is highly recommended. There are special constructions in which the contract is concluded shortly before a planned homeownership and then mortgaged for the deposit in order to benefit from the promotion, but these are rather marginal.
The profound meaning is that the purchase of home ownership has been saved. The contract can itself be made very flexible.
The most important point here is the determination of the credit interest in the savings phase and the later loan interest. These are, of course, in a balanced relationship, so are rather equally high or low, and this has increased the variety of tariffs in recent years. That means, not only whether, but above all how a home savings contract is to be completed, is the question.
Therefore, a home savings should first ask if he really wants to build, secondly when that should happen to what extent and thirdly whether he sets on rather high or rather low loan interest in about seven years – then you would make the Basapas contract.
In 2011, you would choose a low loan, but also credit. Because the loan interest rates are likely to rise again, we are in a historic low-interest phase. Although the credit balance is also lower interest, but the savings credit is usually smaller than the loan taken later, thus resulting in future interest rates increase interest, if now low interest on loan and credit side are chosen.
Pros and cons of building savings
The advantages lie in the above-mentioned savings discipline, state subsidies and the securing of a loan interest rate that is likely to be favorable in the future. Thus, a home savings contract in the current low interest phase takes over the function of a forward loan, only with a much longer term (this is granted a maximum of 60 months).
The advantages of the Basapas contract in the overview:
- savings discipline
- state funding
- high mortgage possible
- subordinate land register entry
- large tariff selection (flexibility)
- Planning security through fixed interest rates
- Possibility of free special payments
A Basapas contract can also have disadvantages, especially if the construction project is actually not established. In particular, if the contract is low interest and later renounced on the loan, subsidies may have to be repaid and the balance shows only a low interest income, a time deposit would have been more advantageous.
The disadvantages of a home savings contract at a glance:
Different long allocation periods. The allocation is made according to a key of the building society, which is directed after its pool to Basapasern. The individual saver has only limited influence on the exact date.
- the saver needs a long breath
- Basapas contracts are provided with fees, sometimes these are quite high.
- A residual debt insurance can be obligatory, which increases the loan costs again.
- The transparency of Basapas contracts is very bad. A layman sees through the construction of individual tariffs without complex PC program definitely not.
The promotion of home savings
Basapas was also because of state support measures always very popular, some savers took advantage of the premiums in the Ansparphase of the credit and later renounced the building society loan. Thus, the promotion of their Basapas contract contradicted the original intention of housing subsidies.
Therefore, subsidies have only been granted in Germany since 2009, when real property is bought, rebuilt or modernized. This applies to all contracts concluded since then, for savers under the age of 25, the exception was created that they may keep the promotion after a seven-year blocking period even if the loan is not used.
The Housing Premium:
With a taxable income of 25,600 USD for single persons, 51,200 USD for married couples 45.06 (90.11) USD maximum premium to a savings of 512 (1024) USD granted. The premium is generally 8.8 percent to a minimum saving of 50 USD per year for the expenses on the contributions, the credit interest and the closing fees.
The employee savings allowance:
Employees can apply for an additional savings allowance via the tax return if they have the capital contributions that the employer can grant paid into the building savings account. The employee savings allowance amounts to 9 percent per person per year, to a maximum of 470 USD per year (double for married couples). Here, however, even lower income limits apply, for singles 17,900, for married couples 35,800 USD annually.
The subsidy through the employee savings bonus is regulated in the Fifth Law on the Creation of Wealth. The term is usually seven years with a non-contributory last year.
Compare building savings offers
Who compares Basapasangebote, pays attention to the flexibility of the building societies in terms of interest rates and maturities, on the interest rates themselves, the closing fees and interest rate bonuses. These are paid by some building societies in a loan waiver after seven years. Interest rates are sometimes very flexible, for example, credit interest rates can increase in stages.
Undecided savers put on flexible tariffs, which allow the saving with a low, later which would like to build in each case, put on low loan interest, even if this means lower credit interest. Decisive in the comparison is that the building society meets the individual Basapas wish of the customer with great flexibility.