The bank savings mortgage
What is a bank savings mortgage? The Bank Savings Act was introduced on 1 January 2008. This law makes it possible to save tax-free with bank products for the repayment of the mortgage. Previously, this was only possible with insurance products (endowment insurance for the owner-occupied home).
The bank savings mortgage consists of a combination of a mortgage loan and a blocked savings account (SEW: Savings Account for Own Home) or an investment account (BEW: Investment right for Own Home). No repayments will be made during the term of the mortgage. However, an amount is deposited into the bank savings or investment account every month. At the end of the term, the loan can possibly be repaid with the accrued value in the account.
The bank savings mortgage has been very popular for several years. But since the compulsory annuity repayment of new mortgages from 2013, this has partially come to an end. New homebuyers will no longer be able to use the bank savings mortgage from 2013, otherwise they will not be entitled to mortgage interest relief. For existing mortgage holders from before 2013, any bank savings mortgage will be respected for tax purposes. So they retain mortgage interest deduction, even if they have a bank savings mortgage.
Overview of the most common mortgage types
Overview of current mortgage interest rates
More information about bank savings