A home savings contract is made up of two parts. The balance and the loan. The peculiarity of building savings is that you first save your own credit, as a form of equity and thus acquires the right to a loan.

At the conclusion of the Bauspar contract you set the Bauspar sum. It is composed of the balance and the home savings loan and is the amount of money that you get paid at the end of the savings phase. This can then be used for the construction of a house, the purchase of an apartment or for other construction and modernization measures in the home. Please note: the home savings loan must be used for a house or apartment. The technical term for this is residential use. Which building measures and purchases are right for this area, you can ask in doubt at the building society.
How does the Bauspar contract work in detail?

Bauspar is divided into three phases. If you have concluded a home savings contract, you first start to save credit. This happens in monthly savings rates. The amount of these installments is determined upon conclusion of the contract and is based on the one hand on the amount of the home savings and on the other after the desired Bauspar contract term of the savings phase. A fixed term does not exist in the Ansparphase, only a minimum term, otherwise it is the bauspar set free how fast he wants to build his credit. This flexibility is one of the big advantages of Bausparing.

For the credit, which is kept at the Bausparkasse, similar to a savings account, receives the Bausparking interest. Therefore, many people like to use the Bauspar contract as an investment. The Bausparkassen responded accordingly and offer special Bauspartarife, which offer advantages especially for saving and are particularly suitable for home savings as a financial investment.
allocation

If you have accumulated enough credit, you enter the next phase with his Bauspar contract: the rationing license. During the allocation phase, a decision is made on how to proceed with the home savings contract. So whether you can pay off the accumulated credit or if you want to take the loan. Both variants are possible and subject to other conditions. In addition, you have to meet some requirements, such as minimum term and sufficiently high rating to be eligible for all rights.
Classic Bauspar contract: How does it work with the loan?

With the credit one acquires the right to a home savings loan. This will be paid out after the allotment together with the loan. So you get the entire Bauspar sum as a cash receipt. From then on you do not pay monthly savings but have to repay the home savings loan. Similar to mortgage lending, a fixed monthly installment is then paid for a fixed term.

In contrast to traditional financing, there is no residual debt at the end of this term, but the entire loan is repaid within the term. This sometimes leads to higher monthly rates. But the home savings loan has an unbeatable advantage: Special repayments are possible at any time. You can even pay for the entire building loan in a single payment without any additional costs or fees.
Extras: tariffs and subsidies

Originally the Bauspar contract was intended to help people with lower incomes and low equity but still to a home. The state also supported this idea and has always supported building society savings. There are therefore some government building subsidies, such as the housing premium and the employee savings. These help the building savers to build additional credit and pay back the loan.

An adaptation to modern financial products are the different rates for home savings, which are now offered by the building societies. In order to adapt optimally to the customer needs, there are different tariff variants with different emphases. So you can always get the best possible conditions, which are ideally matched to the desired home savings target. The subtleties are different from tariff to tariff and from building society to building society, nevertheless, the following tariff emphasis can be fixed:

Classic home savings contract: favorable loan for construction projects