The link with savings agreements and equity investments should be treated with caution. This is more expensive or dependent on rising stock prices.

Festdarlehen in literally solid components in the financing of owner-occupied homes. Although critics complain for years that the combination of savings agreements and mutual funds is not worth because of the costs and risks. The criticism can be banks, building societies, and investment companies but cold. The suppliers describe their solution as simple, practical and good. The wisecracking should be treated with caution. The packages can be useful in certain cases. Usually combinations but more expensive or dangerous than classic annuity. The reasons are clear in the following examples.

250,000 euros are needed for financing a home. Of which three-fifths or 150,000 euros represented by a traditional mortgage. The fixed rate is 2.75 percent. The repayment is 2 percent. The conditions apply for ten years. The remaining two-fifths consist of two contracts. This is, on the one hand, a fixed loan, and that is on the other side a building loan or a stock savings plan. The savings period of the savings agreement is achteinviertel years, and the amortization of the building society loan is eight years. The fixed-rate loan is up to the allotment of the savings agreement. Overall, this combination so it runs 16 years and three months.

Hardly interest in building savings

The savings agreement begins with the acquisition fee of 1000 euros. In most cases, the costs are offset by the first savings rates. They are in this case at 500 euros a month. Consequently, the first and the second in the pockets of the representative disappear. After that, the rates in the savings pot of cash flow. There they will bear interest at 1 percent per year. After eight years and three months are in the account when the rates have been regularly paid, 50,484 euros.

The sum looks innocuous at first glance. but who is likely to take a calculator and added the installments paid, will take the amount with some frown note. 99 installments of 500 euros or in the sum of 49,500 euros was paid to the building society. This is what 50,484 euros in the account. This is an increase of just 984 euros and should small and large savings foxes, keep in mind that there is little in this contract interest rates are. Mathematically interested investors can be revealed that the annual return of the savings contract is 0.5 percent.

Higher interest rates on loans

In the same period, falling for the fixed loan but borrowing rate of 2.64 percent in the year. These are 220 euros a month, and these amounts are not at some point, but to pay the same, because the credit is needed today.

Otherwise, the financing of a home would not be possible. After years of achteinviertel advance loan can be replaced because the building society will allocate their loan. This credit is, that’s for sure today, cost a nominal 3.75 percent a year. The monthly payment for interest and principal is 600 euros. This leads to the borrower for a term of eight years. Consequently, the combination runs a little more than 16 years.

Now the question is how much the combination costs. There is the one observer, which add up the rates in the sweat of their brow. Upper secondary school teachers, for example, will come through solar calculators to the conclusion that the homeowner will have paid a total of 128,880 euros. This is mathematically and factually correct, but the result is not even approaching useful because the exact times at which the installments are due are not included in the addition.