A Bausparvertrag (home savings contract) combines saving and financing: first you pay in, later you are entitled to a loan at an interest rate fixed today. If you want to use the contract for financing, focus above all on the effective annual rate of the Bauspar loan – and on the closing fee, which is due when the contract starts.
Terms updated daily from the FinanceAds comparison calculator for home savings. The interest ranges result from the tariff variants and the loan amount; the building society's (Bausparkasse) offer is always what counts.
How Bausparen works
A Bausparvertrag (home savings contract) has two phases. In the savings phase you pay into the contract every month until a certain share of the contract sum (Bausparsumme) has been saved (usually 30–50%). The contract is then ready for allocation (zuteilungsreif): in the loan phase you can draw the rest of the contract sum as a loan – at the interest rate that was fixed when the contract was signed. That is the core of the product: you secure tomorrow's interest rate today.
What to look out for when comparing
- Effective annual rate of the loan – the decisive figure if you want to use the contract for financing. Besides the borrowing rate (Sollzins), it also includes the ancillary costs.
- Closing fee (Abschlussgebühr) – usually around 1.0 to 1.6% of the contract sum, due directly when the contract starts.
- Interest on savings (Guthabenzins) – the interest in the savings phase is low for most tariffs; for a loan-oriented tariff it is of secondary importance.
- Account fee – some building societies charge an annual fee on the home savings account.
- Standard savings contribution & minimum savings period – determine how quickly the contract becomes ready for allocation.
- Loan fee (Darlehensgebühr) – good tariffs waive it; otherwise additional percentages are charged on the loan.
Who Bausparen is worthwhile for
Bausparen makes sense above all if you want to build, buy or modernise in a few years' time and would like to secure today's interest rate level. It is also a tool for follow-up financing (Anschlussfinanzierung) of an existing loan: a home savings contract can cushion the risk of rising rates once the fixed-rate period ends. If, on the other hand, you only want to save, you are usually better off with instant access savings (Tagesgeld) or fixed-term deposits (Festgeld) – the savings interest of Bauspar tariffs is low.
Don't forget: depending on income and use, you may be eligible for the Wohnungsbauprämie (state housing bonus), the Arbeitnehmersparzulage (state employee savings allowance) and capital-forming payments from your employer (vermögenswirksame Leistungen). They noticeably improve the return in the savings phase.
State support 2026: Wohnungsbauprämie and Arbeitnehmersparzulage
- Wohnungsbauprämie (housing bonus): since 2021 it amounts to 10% of the savings, with a maximum of €700 a year subsidised for single people and €1,400 for married couples or registered partners – i.e. up to €70 or €140 bonus a year. Condition: taxable income does not exceed €35,000 (jointly assessed: €70,000). The bonus is applied for annually via the building society and is usually only paid out when the money is used for residential purposes.
- Arbeitnehmersparzulage (employee savings allowance): if capital-forming payments (vermögenswirksame Leistungen) go into a home savings contract, you receive a 9% allowance on up to €470 a year (max. €42.30). Since 2024 the income limits have been €40,000 and €80,000 (taxable income). The allowance is claimed with your income tax return.
- Wohn-Riester: special Riester home savings tariffs are subsidised with allowances; the support is taxed later in retirement.
Both forms of support can be combined if different savings payments are made. This information does not replace tax advice.
How it works: from the savings phase to allocation
When you sign the contract you fix the contract sum (Bausparsumme), which is the total of your savings and the later loan. The closing fee is charged at the start, after which you pay the agreed standard monthly contribution. The building society continuously calculates a valuation figure that takes the amount and duration of your payments into account. Once the minimum savings balance, minimum savings period and valuation figure have been reached, it can allocate the contract.
On allocation you have a choice: you can draw the home savings loan, have only the savings paid out, or keep saving. The loan is usually secured by a land charge (Grundschuld) in the land register, although other security is possible for smaller amounts. Because the loan rate is fixed at signing, repayment in the loan phase is usually high: a monthly repayment contribution calculated as a per-mille share of the contract sum is common.
Building societies are governed by the German Building Societies Act (Bausparkassengesetz) and supervised by BaFin, the financial regulator. The general terms for home savings contracts regulate allocation, fees and termination. Read them before signing, because they are binding and differ from one building society and tariff to the next.
Worked example with sample values
The following figures are freely chosen sample values and not the current terms of any tariff. Suppose you sign a contract for a contract sum of €100,000. With an assumed closing fee of 1.6% you pay €1,600 at the start. Let the standard savings contribution be 4‰ of the contract sum, i.e. €400 a month, and the minimum savings balance 40% (€40,000).
Purely arithmetically you then need about 100 months, or just over eight years, to save €40,000. Interest on savings and any state bonuses shorten this period somewhat, while the closing fee and a possible account fee lengthen it. For the loan of the remaining €60,000, an assumed repayment contribution of 6‰ of the contract sum gives a monthly instalment of €600 plus interest. The lower the loan rate, the shorter the loan runs.
The example shows why comparing is worthwhile: even small differences in the closing fee or the borrowing rate add up over decades. One percentage point of closing fee on a €100,000 contract sum means €1,000 of extra cost, which eats into the return in the early years before the balance can start working.
Termination, switching and typical pitfalls
A home savings contract can in principle be terminated at any time and the balance paid out. This is particularly disadvantageous if the closing fee has not yet been offset by interest and bonuses. If you are unsure whether you can keep up the payments for years, choose a tariff with flexibly adjustable contributions. The building society may also terminate contracts: according to the Federal Court of Justice (judgment of 21 February 2017, XI ZR 185/16) it may do so ten years after the contract became ready for allocation if the loan is still not drawn.
Another pitfall is contracts with rising instalments or with a loan entitlement that brings hardly any advantage in a low-interest phase. If you want to use the contract to finance a property, also clarify when allocation is realistically going to happen. If the financing is needed well before the contract is ready for allocation, a bridging loan (Vorausdarlehen) may be necessary, where you initially pay only interest while continuing to save.
Finally, be wary of intermediaries who try to sell a home savings contract as an investment product. Interest on savings is low in many tariffs, and Bausparen is primarily a tool for securing an interest rate. Compare several offers and work out the total costs.