Mortgage rates have been falling since the end of June.

While the effective interest rate on a loan with a ten-year fixed interest rate was around 3.4 percent on average at the time, only 2.7 percent is currently due.

Nevertheless, the rise in construction interest is enormous;

the last time the loan was as expensive as it is ten years ago.

Martin Hock

Editor in Business.

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This awakens interest in a form of financing that has been sidelined for years: building society savings.

This has suffered in two ways from the low interest rates in recent years.

For one thing, mortgage loans were also cheap, so that the more complicated home loan savings offered hardly any advantage.

On the other hand, the savers received practically no credit interest during the savings phase.

As a result, one or the other building society would like to get rid of savers with high-interest old contracts, which they had previously lured into the contracts as a savings investment.

In the end, it was up to the courts.

Now everything is different.

Although there is still hardly any credit interest on home savings contracts, the interest on home savings loans has also essentially not increased.

In a recent test by Stiftung Warentest, in which they examined 200 tariff variants, the average loan interest was just under 2 percent.

The foundation assumes that the interest rate advantage will remain in place for the time being.

supplement, not a substitute

This puts the classic benefit of building society loans, protection against rising interest rates, back into focus.

After all, anyone who concludes a contract today will still have the same conditions available in five or ten years.

However, a home savings contract should match the specific savings goal.

To do this, the testers examined three model cases with savings phases of four, eight and twelve years and came to the conclusion that up to 400 euros a month can be saved compared to bank financing.

However, a home savings contract is a complicated product.

According to the foundation, a low loan interest rate or a low minimum balance that needs to be saved says nothing about whether a tariff is really cheap.

if, for example, the cheap loan is not available in time, this can mean expensive interim financing.

If too much is saved, the measly credit interest also reduces the advantage.

The testers advise not to finance more than 20 to 40 percent of the purchase price through home savings when buying a property.

This should be seen as a supplement rather than a replacement.

Because a building society loan has to be repaid much faster than a mortgage loan.

This means comparatively high monthly rates.

Bauspar contracts could make the purchase of real estate, but also follow-up financing, much easier, according to the construction financing specialist Dr.

Small.

For example, if you set the initial repayment of a mortgage loan lower and put the savings into a home savings contract, you can effectively reduce the remaining debt at the end of the fixed interest period with a low-interest home savings loan – although Dr.

Klein points out

The financing consultant Interhyp, in turn, sees home savings contracts as a possible means for buyers of "energy-problematic old buildings" to secure current interest rates for future renovations.

The use of a home savings loan in the financing can also reduce the cost of a bank loan if the loan amount falls below 80, even better 60 percent of the property value.

For small loans, banks also often charge interest premiums, while building societies do not.

In the test by Stiftung Warentest, Signal Iduna came out best with the Freiraum F30 tariff over four and twelve years of savings.

BHW offered the best conditions for eight years and the second-best conditions for four years.

LBS Saar, Alte Leipziger and Wüstenrot were also among the top five providers.