Mortgage interest rates have tripled since the beginning of the year, but they have remained constant for building societies, according to Finanztest. The classic benefit of home savings loans is thus once again in focus: protection against rising interest rates.
With the sharp increase in mortgage loans since the beginning of the year, home savings is becoming attractive again: home savings loans are currently cheaper than bank loans “and will probably remain so”, as the magazine “Finanztest” reports. Mortgage interest rates have tripled since the beginning of the year. Instead of less than 1 percent, real estate buyers paid almost 3 percent interest per year for a bank loan with a term of ten years at the end of July 2022.
There are no such leaps in interest rates at building societies. In their current tariffs, they usually charge 1.5 to 2.5 percent as loan interest – no more than in the previous year. And for savers who conclude a contract today, these conditions will still apply in five or ten years.
Finanztest examined 200 tariff variants of the 17 building societies in Germany and shows the best tariffs for financing in four, eight and twelve years.
Home savings loans were introduced to protect against rising interest rates. “Anyone who concludes a contract today will still have the same conditions in five or ten years,” explained “Finanztest” in advance from the September issue. Part of the financing is therefore independent of how interest rates develop.
Real estate buyers will then need less money from the bank in the future – and can thus get a lower interest rate later. An advantage according to “Finanztest” is that the interest rate for building society loans also applies to small loan amounts; In addition, arbitrarily high special repayments or a complete repayment are possible at any time. “How good a home savings contract is is shown by how it fits the specific savings target,” according to the testers. They calculated model cases and looked at interest rates, fees, minimum savings and standard savings contribution.
In the first model case, the purchase of a house is planned in four years. Until then, first 40,000 euros and then 300 euros per month will be paid in. In the second model case, customers save 400 euros a month and need the money in eight years. In the third case, 250 euros are saved monthly to finance a property in twelve years.
The result: No building society can score in all three model cases, as “Finanztest” announced. Signal Iduna came first in two cases, BHW took first and second place once each.
“Finanztest” warned that home loan savings are often “so complex that even advisors to building societies lack perspective”. The right timing is particularly important: A good contract is adjusted in such a way that the home savings sum is likely to be available on time for the planned financing. “Otherwise, savers will have to postpone their plans or bridge the waiting time until allocation with a bridging loan.” A few months are not a problem, but if the home savings contract is only ready for allocation many years after the desired date, a bridging loan can become extremely expensive.