“My parents took out a Bausparvertrag for me – what do I do with it?” Bausparen is one of Germany’s oldest and least understood financial products. Here is the principle.
The principle: save first, borrow later
A Bausparvertrag is a contract with a building society over a Bausparsumme, say €50,000, which later splits into your savings balance and a Bauspar loan. The loan rate is fixed at signing; in return you earn very little while saving.
Phase 1: saving
Regular contribution usually 3–5 per mille of the Bausparsumme per month; savings interest currently only 0.01–0.25 % p.a. (Stiftung Warentest 09/2026); closing fee 1–1.6 % of the Bausparsumme, one-off and not refunded – €500–800 on €50,000.
Phase 2: allocation (Zuteilung)
Three conditions: a minimum balance of 30–50 % of the Bausparsumme (often 40–50 %), a minimum savings period, and a rating number (“money × time”) reaching the tariff’s target. The allocation date may not be guaranteed.
Phase 3: the loan
Bausparsumme minus balance at the fixed rate (currently 1–3 % in new tariffs), high repayment, 7–15 years, penalty-free special repayments, housing use only – purchase, construction, modernisation, replacing a mortgage.
State bonuses 2026
| Scheme | Rate | Eligible savings | Max. bonus | Income limit (taxable) |
|---|---|---|---|---|
| Housing premium (Wohnungsbauprämie) | 10 % | €700 / €1,400 (couples) p.a. | €70 / €140 | €35,000 / €70,000 |
| Employee savings bonus on employer-paid capital-forming benefits | 9 % | €470 p.a. | €43 | €40,000 / €80,000 |
Legal bases: §§ 2a, 3 WoPG and § 13 Fifth Capital Formation Act. The premium requires housing use, except for under-25s after seven years. Wohn-Riester is a third, complex scheme – named only.
Combination models
A Sofortfinanzierung gives you an advance loan for the full sum today (interest only) while you save; the contract later repays it. Consumer advice centres warn these are hard to see through; demand the overall effective rate across both phases.
Pros and cons
For: rate certainty for a future loan; bonuses for low and middle incomes; penalty-free repayments; small sums financeable. Against: closing fee and near-zero interest – those who never borrow usually lose out; high instalments; uncertain allocation date; housing use only. Whether and what suits you is something to clarify with an adviser licensed for that purpose.
Cancellation
By you: any time; payout usually three to six months later; the closing fee is lost, premiums are lost before seven years unless used for housing. By the society: when the balance reaches the Bausparsumme, or ten years after the first allocation opportunity if no loan was drawn (Federal Court of Justice 2017, § 489 BGB).
How to proceed
- Read the contract: sum, tariff, minimum balance, loan rate, fee.
- Check your goal: housing finance in the foreseeable future?
- Apply for bonuses: premium via the society, employee bonus via your tax return.
- For combination offers, demand the overall effective rate in writing.
- Clarify with a licensed adviser whether the contract fits.
General information, not legal, tax or investment advice. Sources: Housing Premium Act (§§ 2a, 3 WoPG), Fifth Capital Formation Act (§ 13), German Civil Code (§ 489 BGB), Stiftung Warentest (as of 1 Sep 2026), consumer advice centres (as of 10 Nov 2025) – as of October 2026. Got an old contract and no idea what it is worth? Get in touch.
