Glossary

Use our Glossary to understand the different German mortgage terms and definitions

Bausparvertrag

Building society savings plan

Established in times when interest rates were high. The basic principle is a community of savers who renounce returns during the savings phase and receive a loan of approximately the same amount after about 10 years in addition to the saved capital. The interest rate for this loan is already known when the contract is concluded. The loan must be repaid then (again )within 10 years. Since the mortgage interest rates has been very low for many years now, this instrument has somewhat gone out of fashion. The fast repayment of the loan is often connected with a high liquidity expenditure.