Beware of combined loan with Bauspar contract

Building societies use loopholes to disguise costs

Numerous home loan and savings banks advertise with particularly low construction loan interest, interest rate security and a flexible repayment for real estate financing with a combined loan from a mortgage lending and a home savings contract . “But beware,” warns Stiftung Warentest in its magazine Finanztest 02/2014 on real estate financing. “A legal loophole allows building societies to advertise combi loans with misleading effective interest rates. It lacks covert credit costs of many thousands of euros “, writes the Stiftung Warentest in the latest issue Finanztest.

What is a combination loan?

Combined loans differ from ordinary real estate financing, above all by the way in which the construction loan is repaid. In the case of a combination loan, the homeowner only pays the interest on the real estate loan. At the same time, every month he transfers an amount into a home savings contract without paying off his debt of real estate financing! Only when the Bauspar contract is awarded does the home savings bank replace the real estate financing – the so-called advance loan. Thereafter, the homeowner pays the rates for interest and repayment of the building loan.

Misleading interest rates for the combination loan

As a rule, savings and loan associations give two different effective interest rates on real estate financing for a combined loan. The first for the advance loan and a second for the subsequent building loan. But in these interest rates for real estate financing , the savings contribution for the home savings contract is not taken into account. “In fact, the effective interest rate of the combi-credits is almost always well above the effective interest rate of the individual credit components,” explains Stiftung Warentest in its journal Finanztest 02/2014. “Although the Bauspar contributions are an integral part of the financing, the providers do not include a cent of them in the effective interest rates,” said the Stiftung Warentest in the latest issue of financial test on combi credit.

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Lack of interest rate security on the combination loan

It often happens that the debit interest of the advance loan ends long before the allocation of the Bauspar contract. As a result, the home loan saver has a considerable interest rate risk in its real estate financing. Because if the Bauspar contract is not allocated, the advance loan must be extended with rising interest rates for building land with a higher interest rate. “Make sure that the interest rate for the advance loan until the allotment of the Bauspar contract is fixed,” advises the Stiftung Warentest in their journal Finanztest 02/2014 on real estate financing.

No real special repayment on the combination loan

The flexible special repayment options for mortgage lending with a combined loan should also be examined more closely. In combi-credits, there is often no right to special repayment of real estate financing until allotment of the home savings loan. As a rule, home savings savers can only make special payments in the low-interest home savings contract. A real special repayment of real estate financing, which reduces the debt immediately and leads to a real saving on loan interest, is not given.

The Stiftung Warentest advises in its magazine Finanztest 02/2014: “Let always call in writing the total effective interest rate, which also includes the savings contributions and fees for the home savings contract. This is the only way you can compare combi-credits with one another and with bank offers. “

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