A „housing-and-savings-contract“ is a contract which combines a savings agreement with a real estate loan.
To understand this product it is best to realize that you are in affect dealing with three products:
An Annuity Mortgage with zero principal repayment and fixed interest rate.
A savings contract in the same amount. Instead of repaying each month the mortgage, the repayment portion of the monthly rate is used in the first phase towards reaching the savings goal required by the savings contract (30-50%).
A Bauspar Loan. Once the savings goal of the savings contract is reached and you are eligible for pay-out, the savings and a new Bauspar Loan are used to pay-off the annuity mortgage. This Bauspar loan is in turn repaid at a previously agreed interest rate, till the loan is fully repaid. In other words: you can fix the interest on your mortgage till it is fully paid off.
So the main advantage is that the interest rate is fixed over the entire period.
But there are drawbacks. These contracts have up front fees, the savings contract pays low interest rates and there may be in some cases an interest rate gap between the Annuity Mortgage and Bauspar Loan. Hypofriend has therefore built calculators that allow us to evaluate all the cost and it makes sense for you.