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Using the existing building savings contract to finance a property can save a lot of money – even if the contract is not yet ready for allocation.
Using building society loans for real estate financing was not attractive for a long time in the low interest rate phase of the past few years. Compared to the extremely low interest rates on bank loans, they were expensive, and it was usually more worthwhile to just use the savings you had saved for building financing at the bank – or for your next long-distance trip.
However, the loan interest rates for many older building savings contracts are now significantly below the current interest rate for real estate loans at the bank. For many buyers, it is worth incorporating the building society loan into the financing – even if the contract is not yet ready for allocation as planned. We use two real contracts to calculate how the loan can best be used to purchase a property.
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