Building loan agreement
A building society loan agreement is a financial product that the investor ( building society saver ) concludes with a building society and the elements of the saving contract ( building society savings ) and real estate financing ( building society loan ).
The home loan and savings contract is the combination of saving and mortgage lending . It is an asset class for the tax-subsidized capital formation benefits for granting the employee savings allowance and housing construction bonus . In addition, building society savers can use the income-independent Riester subsidy ( "Wohn-Riester" ) in the savings and loan phase of the building society contract. When the savings target is met by reaching a specified minimum savings balance, the saver acquires a legal right to the allocation of a purpose- specific construction finance for residential property ( Section 1 (2) BauSpkG).
The home loan and savings contract is a mixed contract that contains elements of a savings contract and a loan agreement . The legal basis is the Bausparkassengesetz (BauSpkG) and the Bausparkasse Ordinance (BauSpkV). With the credit agreement is a surety connected which the subsequent building loan mortgage on ownership of Bausparers or third protection provider secures. The building society sum of the contract is made up of the building society balance to be saved (usually 40% to 50% of the building society sum) and the building society loan. The building society credit represents the refinancing for the building society loan of other building society savers within the framework of the special-purpose community of all building society savers. The contractually stipulated waiting period is the period from the start of the building society contract to the allocation (§ 1 Paragraph 8 BauSpkG). After this waiting period has elapsed, the building society savings amount is allocated from the allocation fund (Section 1 (6) BauSpkG). According to Section 5 (1) of the BauSpkG, building societies may use “General Conditions for Building Saving Contracts” (ABB) as a basis, which apply as general terms and conditions .
According to Section 4 (1) of the BauSpkG, building societies may also grant pre-financing and interim financing . Pre-financing is used to bridge the gap until the home loan savings amount is paid out upon allocation, as long as the home loan and savings contract has not yet reached the required minimum savings. Intermediate financing , in turn, is granted as an advance loan if the required minimum savings have been reached and the home loan amount has not yet been allocated. The extremely high earmarking results from Section 6 (1) BauSpkG.
The agreed contract is concluded savings rate which determines interest rates ( savings interest rate and loan interest ), the savings period, the repayment period, a possible minimum contract period, the minimum balance on allocation that Regelspar- and principal posts and the acquisition commissions already in the contract. Building societies offer different building society tariffs, e.g. B. Standard tariffs, quick-save tariffs, long-term tariffs, variable tariffs. The duration of a standard tariff is between 18 and 20 years, of which around 7 years are savings.
After conclusion of the contract is usually acquisition commission requires at least 1 percent of the savings, which reduces the effective credit interest. The Bauspar sum is the sum of the savings portion and the possible Bauspar loan. Savings and loan rates are always fixed rates . The savings interest is calculated based on the saved credit, the loan interest is calculated based on the nominal contract amount, not only on the actual loan amount.
Since the building society loan is mainly paid out of the saved credit balance of other building society savers whose contracts are not yet ready for allocation, it is not possible to predict exactly how much capital will be available for allocation. For this reason, it is not possible to specify a fixed evaluation number from which a contract is allocated. Building societies are also not allowed to make any binding statements about the allocation prospects.
Processing of the home loan and savings contract
Bausparen is divided into three phases:
The contractually agreed Bauspar sum is saved at the contractually stipulated percentage. The savings capital is collected by all of the building society's savers; this limits the amount of credit currently available to all borrowers. The Bauspar sum can be topped up at any time, thereby extending the time of allocation for contracts in the savings phase.
The minimum savings balance required for allocation is accumulated in the savings phase. The building society saver should save on the building society loan contract with at least the standard contribution (between 3 ‰ and 10 ‰ of the building society sum per month, depending on the tariff). The method and amount of payment (monthly, quarterly, etc.) can be chosen by the saver himself. Most building societies have stipulated in their general building society terms and conditions that if the contract is not saved, termination can be given by the building society.
The basic release of the building society for disbursement is referred to as the allocation of the building society loan agreement. At the time of the allocation, the building society saver can have the credit and - after providing sufficient collateral - the loan paid out. The home loan and savings contract can be allocated if the allocation requirements are met. The criteria for readiness for allocation are set out in the general terms and conditions for home loan and savings contracts and vary depending on the tariff and the building society.
As a rule, the following allocation requirements are agreed:
- Minimum balance
- The home savings balance must have reached a contractually stipulated percentage (usually 40 or 50 percent) of the home savings sum. Building society deposits as the sum of the contributions made on a building loan contract is deposits (including the capital accumulation benefits ) and the credited interest rates and house building premiums referred.
- Minimum contract duration
- Period that lies between the conclusion and the earliest possible allocation date of a home loan and savings contract.
- Minimum rating number
- Contractually stipulated rating number that must at least be achieved for an allocation.
- Minimum saving time
- Describes the shortest possible period in which the savings deposits have to be made.
The order of allocation to the total number of prospective loan buyers is determined based on the rating number. The valuation numbers are calculated on fixed valuation dates and sorted according to the amount. The home loan and savings contract with the higher rating has priority for the allocation. The valuation number is calculated from the savings contributions, the accrued interest and the term of the contract. The end of the quarter (March 31, June 30, September 30 and December 31) is used as the valuation date for older tariffs . Monthly calculations are common today.
Rating number and allocation
The valuation number is calculated from a time factor (period of the transfer of the savings credit) and a money factor (ratio of the savings credit to the home savings amount). The general terms and conditions for home savings must disclose the calculation method to the home saver. Once the required rating has been reached, the award is made. The building society loan contained therein must be earmarked for housing measures (Section 1 (1) BauSpkG) and is a long-term annuity loan . The loan security for a building society loan is usually a mortgage ( security mortgage ) in second place on the object to be lent with a lending limit of 80% of the mortgage lending value . The loan-to-value ratio must also not exceed 80 percent. Loans from the non-collective area can be secured up to € 30,000 by means of a negative declaration , provided that a corresponding mortgage security is basically possible. Loans from the collective funds of the building society, i.e. building society loans, but also pre-financing and bridging loans can be up to max. € 30,000 can be granted as a so-called blank loan even without a negative declaration ( Section 7 (4) BausparkG in conjunction with Section 6 (1) BspKV). For such a blanket loan there does not even have to be the theoretical possibility of a mortgage protection, so that z. For example, tenants can also receive such a blank loan for the modernization of their rented apartment. This is a very decisive advantage of building society savings, namely guaranteed low loan interest despite the waiver of real collateral.
Before the allocation, the loan documents and lending documents for a loan decision must be submitted to the building society . When the savings agreement is not yet ripe allocation, building societies offer an advance loan is a bridging loan to.
The part that is missing up to the concluded contract amount is granted as a building society loan when the building society contract is ready for allocation, so that the building society saver can dispose of the full building society sum after allocation. The borrower pays the contractually agreed loan interest for the loan. This applies regardless of the current interest rate level on the money market .
The building society loan is repaid in the loan phase. The building society loan is provided with an interest rate that was set when the building society contract was concluded . The building society loan can be repaid in whole or in part at any time without incurring the usual prepayment penalties for banks .
Bauspar loans are annuity loans with a fixed interest rate over the entire term. The initial repayment is, depending on the tariff, between 0.2 and 0.9 percent of the home loan and savings sum per month. The loans can also be secured by term life insurance . This means that the insurance company pays the outstanding loan amounts back to the building society in the event of the death of the building society saver. The home saver bears the costs of this term life insurance. These costs are shown in the effective interest rate of the building society loan. However, there is also the possibility of the risk of death over the assignment of life insurance cover other insurance.
Calculation of the rating number
The rating number decides essentially about the time of the allocation of the contract. The calculation of the rating number not only includes the saved credit, but also the period over which this credit exists. A high rating number can be achieved as follows:
- Either a large amount of credit is saved over a short period of time,
- or a small amount of credit is saved over a long period of time (or even just kept).
From a mathematical point of view, the valuation number is calculated as the integral of the saved credit over time, divided by the savings amount. The latter prevents contracts with a small Bauspar sum from having to wait a long time for allocation. This calculation method results in particular:
- With regular installment payments on the building society loan agreement, the valuation number grows quadratically with time.
- If you let an existing credit rest, the rating number grows linearly over time.
However, the calculation methods of the various providers differ in detail. Some valuation figure calculations are based on the sum of the credit balances on fixed reference dates, while others refer exclusively to the interest earned up to the reference date. Since a building society usually offers a large number of building society tariffs, the individual tariffs in the formula are additionally weighted differently by a tariff factor. Often the number is also multiplied by a fixed constant. The latter, however, is irrelevant because the rating number is only used to sort the individual contracts according to it; since all numbers are multiplied by the constant, their order remains unchanged.
Basically, every building society is legally obliged to ensure that the valuation method used treats all building society customers equally and does not favor or disadvantage anyone. This process is monitored by the Federal Financial Supervisory Authority (BaFin).
Possible uses of the building society savings funds
The building society loan can be used for the following residential measures in accordance with Section 1 (3) BauSpkG:
- The construction, procurement, maintenance and improvement of buildings and apartments primarily intended for residential purposes , in particular homes and condominiums , as well as the acquisition of rights to the permanent use of living space ,
- the construction, procurement, maintenance and improvement of other buildings , insofar as they serve residential purposes,
- the acquisition of building land and heritable building rights for the construction of buildings primarily intended for residential purposes,
- the acquisition of building land and heritable building rights for the construction of other buildings with regard to the proportion that corresponds to the ratio of the part of the building to be constructed on the property to the overall building,
- Measures to develop and promote residential areas,
- the redemption of liabilities that have been entered into for the implementation of measures according to numbers 1 to 5,
- the redemption of liabilities that rest on a property that is mainly used for residential purposes.
The repayment of liabilities that have been entered into for the performance of building society deposits, as well as commercial construction projects, if they are carried out in connection with the construction of apartments or in areas that are used for living, and if they are intended for the purpose of housing, are considered to be housing measures To contribute to supplying these areas.
- waiting period
The non-binding estimate of the allocation date when the building society loan agreement was concluded is not guaranteed. It can shift depending on the development of the total home loan savings amount for home loan savers in the savings phase. This can lead to waiting times of months, which can lead to problems for landowners , especially in the case of fixed pre-financing . The waiting time played a major role, especially in the 1980s. In times of low interest rates, however , the average waiting times for building society loans are not a problem. If necessary, the waiting times can be bridged by the customer with pre-financing and bridge financing. The Bausparkasse offers the customer an instant loan with a variable term at market rates. The customer does not redeem this advance loan, but continues to pay into the home loan and savings contract and also pays interest on the advance loan. As soon as the home loan and savings agreement is allocated, the advance loan is completely replaced by the payments from the home loan and savings agreement. From this point in time, the customer repays the loan from the home loan and savings contract.
There are also building societies, which , like credit institutions , agree on fixed terms for pre-financed instant loans . In these cases, these building societies refuse to make special payments on the building society loan agreement for early redemption or allocation. In the event of early termination of the advance loan, the building society will then demand the prepayment interest that is customary in the market, just like with banks. Thus, with these loans you should always pay attention to the loan conditions , otherwise unexpected costs can occur.
- Limiting deposits
The low interest rate level on the capital market places great demands on the building societies because the credit interest and any interest bonuses are contractually fixed and cannot be adjusted to the current capital market interest rates. With older tariffs with a high interest rate, such contracts can no longer be run profitably. Therefore, many ABB contain a supplement that makes the acceptance of a deposit that is above the standard contribution dependent on the approval of the building societies.
Due to the current phase of low interest rates, some building societies are making use of this rule (at least for older tariffs). In this case, deposits are either not accepted or only accepted with certain conditions (e.g. waiver of the interest bonus). Individual health insurance funds have changed over to new contractual conditions, which allow them to adjust the contractual interest and interest bonuses according to a fixed contract period (constant period) of usually 7 to 10 years depending on the market interest rate. However, this only applies to credit interest. The agreed loan interest always remains fixed.
- Closing commissions
Consumer advocates criticize the fact that building society savers can borrow money cheaply due to the low loan interest rates, which, however, are “bought at the cost of low credit interest”. Since the interest on the paid-in amounts is often as low as that on the loan , home savings and loan customers are threatened with negative business in the first few years due to the closing costs.
The legal admissibility of acquisition fees for building society contracts was discussed in Germany for a while. In December 2010 the Federal Court of Justice (BGH) declared the acquisition fees to be permissible. The acquisition fees are usually between 1.0 and 1.6 percent of the home loan and savings sum. However, there are building societies that charge up to 3 percent of the building society sum as a closing fee. Furthermore, some building societies require an additional fee (usually 1.0 to 2.0 percent of the loan) in the form of a premium , which is added to the loan, when the loan is paid out.
- Wave of layoffs
Various building societies have terminated old, high-interest building society contracts on a large scale, the continuation of which is economically unattractive in the current interest rate environment. Insofar as the home saver has already saved up the home loan sum in full, there is broad agreement that such a termination is permissible. However, some building societies also terminate contracts that have been ready for allocation for 10 years if the building society saver has not taken out a building society loan by then. You are referring to Section 489 of the German Civil Code (BGB) . Whether such terminations are also effective is very controversial in the legal specialist literature , especially because Section 489 (1) No. 2 BGB requires a "complete receipt" of the loan amount, which is not given in contracts that are not fully saved (usually 40–50 percent are saved).
On February 21, 2017, the BGH decided that the building societies could terminate building society savings contracts if they were used purely as a savings investment for more than ten years. This contradicts the purpose of building society savings, because the saving is intended to be eligible for a loan. This will be achieved when it is ready for allocation. "After that, home loan and savings contracts can usually be terminated ten years after they are ready for allocation."
Building societies are credit institutions according to § 1 Abs. 1 BauSpkG , but do not belong to the systemically important institutions. Nonetheless, building society savings are to be assigned to the safest asset class, because building societies are largely not subject to any market risk : The collective building society business (building society savings and building society loans) refinances itself (no liquidity risk ), the credit interest rate , like the loan interest rate, is a fixed interest rate (no interest rate risk and no spread risk ) and the granular credit risk is secured and justifiable by mortgages on residential real estate. The public building societies ( Landesbausparkassen ) belong to the Sparkassen-Finanzgruppe and provide security for the Sparkassen, Landesbanken and Landesbausparkassen , so that building society savings are insured without limitation. The building society savings of private building societies are no longer unlimited since March 2017, but are secured up to the statutory upper limit of 100,000 euros by the compensation scheme of German banks ( Section 8 (1) EinSiG ) because the private building society deposit insurance fund (BESF) has been dissolved.
Bausparen in the Autonomous Province of Bolzano (South Tyrol)
The state of South Tyrol pursues a different approach to building society savings from the other German-speaking countries . With the decision of the provincial government no.514 of May 5, 2015, a combination of the second pillar and building society savings was introduced in South Tyrol as part of the Italian pension system.
The model is divided into two phases:
- Savings phase: the prerequisite for using the building society savings scheme is a savings phase of at least 8 years through the payment of contributions to an additional pension fund (comparable to the 2nd pillar in other German-speaking countries).
- Financing phase : a building society loan can be applied for via a contract-bound bank if the requirements have been successfully confirmed by the bank. The loan can be granted up to twice the amount (three times the amount for public employees ) of the capital saved in the supplementary pension fund.
The maximum loan amount is 200,000 euros for individuals and 300,000 euros for spouses and people in similar relationships.
- Advantages of the South Tyrolean home savings model
- Tax advantages : up to 5,164.57 euros per year can be deducted from taxable income .
- Discounted interest rate : Fixed interest rate of 1% (from March 1, 2019).
- The capital in the additional pension fund is not used, similar to a so-called policy loan in other countries.
- Greater incentive, especially for young people, to pay into a supplementary pension fund (2nd pillar), as the advantages of buying and building apartments take effect earlier.
Although the regional pension provider Centrum Pensplan AG is active in both provinces of the Trentino-South Tyrol region, the building society savings model is only offered in South Tyrol. In the autonomous province of Trento , however, the purchase of the first home is supported by the state government if the applicant also builds up a supplementary pension .
The basic idea of building society based on solidarity in Austria corresponds to the German model, but the contract design is much more flexible. In Austria there are four building societies that offer contracts with different conditions. Home loan and savings contracts can not only be concluded with the building societies directly or with a partner bank, but also online. The sales partners save costs and pass part of them on to customers as an online bonus.
Since the savings phase does not necessarily have to be followed by a loan, this form is very popular as risk-free savings with a state premium. In addition, the possible uses of connected building society loans are somewhat more extensive than in Germany, so the loan can also be used for training measures.
The following key points are identical for all offers:
- For the savings phase:
- Monthly, annual or one-off savings,
- Duration at least 6 years,
- variable or fixed interest (between 0.5% and 4.5%)
- Annual state premium (tax-free).
- Loan phase (optional):
- Maximum interest rate 6%,
- Intermediate loan possible after an 18-month savings phase.
The annual interest rate in the savings phase is usually flexibly adjusted to the capital market, often with a fixed interest rate for the first year advertised. The interest rate must be approved by the Financial Market Authority.
The KESt -free state premium is set annually by the Ministry of Finance (for 2014: 1.5%), whereby the percentage does not refer to the credit, but to the annual savings (assessment base max. 1200 €). Since 2013, the premium has fluctuated between 1.5% and 4%, depending on the development of interest rates on the Austrian capital market. It is credited to the building society account on January 31 of the following year.
In the loan phase, a maximum interest rate of 6% is agreed, otherwise the interest rate is often based on the 12-month Euribor with a surcharge.
Until mid-1999, the fixed interest rates for home loan and savings contracts were 4.5% on the deposits and 6% on the loan amount. In the period of low interest rates at the time, these conditions could no longer be maintained. There was a change in the law and a reduction in credit interest rates, including in current contracts. Since then, the interest rates have fluctuated within a defined range and are variable (depending on the 12-month Euribor) or fixed depending on the contract selected.
The state premium has been dependent on the current interest rate since January 1, 1998 . Previously it was fixed at 4.5%.
In Switzerland there are no building societies and consequently no building society contracts. This is related to the imputed rental value for tax purposes , a notional rent that landowners have to pay tax when they live in their residential property themselves. Debt interest for mortgage lending can be deducted from this, which can significantly reduce the tax burden . Since a savings phase is not taken into account for tax purposes, building society savings make no sense.
- Ernst Seidl (Red.): Ready for allocation. Bausparer stories from the southwest , Stuttgart: House of History Baden-Württemberg, 2005. ISBN 3-933726-19-0
- Jörg EG Lemberg / Katharina Flick: Building society savings knowledge for insurance brokers - for examination and practice, 6th edition; Karlsruhe 2011, ISBN 978-3-89952-611-0
- Introduction to building society finance from the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety
- ↑ Jörg Lemberg / Katharina May, Bausparen , 2014, p. 92
- ^ Jörg Lemberg / Katharina May, Bausparen , 2014, p. 90
- ↑ Wolfgang Grill (Ed.), Gabler Bank Lexikon , 1995, p. 227
- ↑ Wolfgang Grill (Ed.), Gabler Bank Lexikon , 1995, p. 226
- ↑ Der Spiegel, edition 35/2013 of August 26, 2013, Financing: Home savings with pitfalls , p. 62
- ↑ BGH, judgment of December 7, 2010, Az.XI ZR 3/10 , full text.
- ↑ WirtschaftsWoche of January 26, 2015, wave of layoffs at building societies
- ↑ Christoph Andreas Weber, Termination of home loan and savings contracts - § 489 BGB as a way out of your own contract design? , in: Betriebs-Beratung from September 7, 2015, p. 2185
- ↑ BGH, judgment of February 21, 2017, Az.XI ZR 185/16, press release
- ↑ Official Journal No. 19 / I-II of May 12, 2015
- ↑ Pensplan Centrum AG: Building Societies (Province of Bolzano). In: Centrum Pensplan website. Pensplan Centrum AG, accessed on September 11, 2019 .
- ↑ Pensplan Centrum AG: Advantages of building savings. In: PensPlan. Pensplan Centrum AG, accessed on November 9, 2019 .
- ↑ ASGB: ASGB - additional pension advice. In: Autonomous South Tyrolean Trade Union Federation ASGB. ASGB, accessed September 11, 2019 .
- ↑ Konsument 3/2011 of February 14, 2011, Bausparen - nicely calculated
- ↑ Verbraucherrecht.at , report of 1 July 1999
- ↑ Konsument.at , notification from November 1, 1999
- ↑ Wirtschaftsblatt.at ( Memento from February 10, 2012 in the Internet Archive ), message from November 17, 1999
- ↑ Bausparkasse.ch, No building savings in Switzerland , accessed on December 16, 2019