Annual Report 2018

Home savings and finance Proven solutions and new advantages

Bausparkasse Schwäbisch Hall optimized its product offering in 2018. This has created additional benefits for customers, including lower rates of interest on loans and more flexible repayment options. By making these kinds of changes, the building society is securing its future competitiveness.

Surveys have found that 90 percent of 13 to 29 year-olds eventually want to live in their own house or apartment. According to market researchers at Kantar TNS, more than three-quarters of them intend to use a home savings plan as a way of saving up the necessary capital. That is why the new system of rates and charges brought in by Bausparkasse Schwäbisch Hall includes a special offer for customers under the age of 22: a one-off young person’s bonus of €100. The annual fee of €12 is also waived. After payout has been approved, customers will also get an interest-rate bonus of 0.15 percentage points.

Customers with a home savings plan can also take advantage of government subsidies. Many employers pay up to €40 per month into an employer-funded capital-formation scheme in addition to employees’ salaries. The government contributes an employee savings allowance of around €43. A government subsidy for homebuyers of approximately €45 may also be available.

All Schwäbisch Hall customers benefit from the traditional advantages of home savings under the new system of rates and charges. Special repayments can be made at any time and free of charge, for example. Home savings loans are very versatile and can be used not only when building or buying a property but also to finance a new heating system or solar panels. Refurbishments, such as a new bathroom, fitted kitchen, or garage, are also permitted under home savings contracts.

The new system of rates and charges has also brought about improvements for home finance customers, who can now enter into a forward loan up to five years in advance. Previously, the forward period was limited to three years. The new rules are particularly attractive to customers looking for follow-up financing, because they can lock in the current low interest rates (plus a forward surcharge) well before the fixed interest rate on their existing loan is due to expire.

Another improvement is that the standard repayment rate on annuity loans can be raised from the previous 5 percent of the loan amount per year to up to 10 percent. This gives customers the option of repaying their loan more quickly and therefore reducing the overall term of the loan. Constant rates and interest-rate security for up to 30 years are still possible for home finance, giving customers a reliable basis for planning.