Eligibility for allocation

Eligibility for disbursement refers to the point in time at which a home savings contract meets the contractual and legal requirements for disbursement-that is, when it is ready for the payment of the accumulated savings and the agreed-upon home savings loan. Only once eligibility for disbursement is reached can the home saver draw down the loan and use it for housing purposes. Maturity for allocation depends on three factors: the minimum savings amount (usually 40-50% of the total savings amount), the minimum contract term, and a sufficiently high valuation figure.

Requirements for Maturity for Allocation

Each building society specifies the exact criteria in its General Terms and Conditions for Building Savings Contracts (ABB). Typically, the following requirements must be met simultaneously: The accumulated balance must reach at least 40-50% of the agreed-upon savings amount, the valuation figure (an internal rating system used by the building society to measure the duration and amount of savings) must exceed a minimum value, and the minimum term of the contract must have expired (usually 18-24 months). If all three criteria are met, the building savings contract is assigned for allocation.

The rating is the least transparent criterion: Each building society has its own system for measuring the creditworthiness of savings behavior. As a general rule, those who save regularly and consistently achieve a higher rating than those who made large one-time payments. The building society provides information on the current rating upon request-savers should check this regularly to monitor their progress toward eligibility for allocation.

Those who wish to accelerate their eligibility for allocation can make special payments: One-time deposits increase the account balance and often improve the valuation score, but they do not automatically result in all three criteria being met earlier-the minimum term is a fixed time parameter. So, if you agreed to a minimum term of 18 months when you signed the contract at age 25, the contract can become eligible for allocation at the earliest at age 26.5, regardless of the total amount saved.

Waiting Period and Allocation Pool

Since building societies operate on the collective principle-the deposits of all savers finance the loans of the allocation recipients-an additional waiting period may arise between reaching allocation eligibility and the actual allocation. This depends on the available allocation pool. During periods of low interest rates, many home savers have delayed their allocation or used the contract purely as a savings instrument, which can extend the waiting period for other savers.

In practice, the waiting period between reaching allocation eligibility and the actual allocation can range from six to twenty-four months-depending on the building society’s order volume and the amount of available capital. This buffer must be factored in when planning real estate financing: Anyone who wants to buy a property in the summer and is waiting for the building savings contract to be allocated cannot rely on it with monthly precision. A pre-financing loan-so-called pre-financing loans from the building society-bridges this gap.

Strategic Importance for Homebuyers

Eligibility for allocation is the decisive moment in a building savings contract: Only then can the low, guaranteed loan interest rate (which was fixed at the time the contract was signed) be utilized. Anyone who takes out a building savings contract early secures a loan with potentially favorable terms-regardless of the prevailing market interest rates at that time.

This interest rate hedging effect was particularly valuable in the period after 2022: Anyone who signed a home savings contract in 2010 or 2015 with a loan interest rate of 2.0-2.5% could draw down this loan on very favorable terms upon reaching the allocation maturity starting in 2022-while the market was already charging 3.5-4.5%. The difference of 2 percentage points on a 10-year home savings loan of 80,000 euros corresponds to total savings of around 16,000 euros.

Timing is crucial for real estate financing: the allocation date and the planned purchase date should be coordinated. Those who wish to purchase a property in the near future can plan the home savings contract as a follow-up loan after the fixed-rate period of an initial mortgage ends-allocation then takes place around the time the main loan is due for renewal.

Building Savings Contract as an Interest Rate Hedge for Renewal

An increasingly recommended strategy is to take out a building savings contract in parallel with an existing real estate loan-with the goal of utilizing the favorable building savings loan at renewal (follow-up financing after the fixed-rate period ends). The home savings loan locks in the interest rate upon signing the contract-regardless of how market interest rates develop until renewal. This strategy is particularly suitable for borrowers who are facing a renewal in 7-12 years and want to limit their interest rate risk.

Practical Tip for Homeowners in Nuremberg and Franconia

In the Nuremberg metropolitan region, many young families use the home savings contract as part of their long-term real estate strategy. Those who start saving early and have already reached allocation maturity by the time of purchase can integrate the home savings loan as a low-interest component into a larger financing structure. Especially in a region with high purchase prices-in the Nuremberg metropolitan area, prices for single-family homes often range between 500,000 and 900,000 euros-every low-interest component is valuable.

We recommend discussing the allocation eligibility and the expected waiting period transparently with the building society when signing the contract and incorporating them into your overall planning. Our network of financial advisors in the region is familiar with the current rates of the major building societies and can help align the optimal timing for signing the contract and allocation with your personal purchase plan.

Frequently Asked Questions

Can I use the building savings contract as a pure savings account after it matures?

Yes. The allocation is an offer, not an obligation. The saver can decline the loan and continue to save the balance-however, in this case, the building society may terminate the contract after a certain period, provided this is stipulated in the General Terms and Conditions. Whether this makes sense depends on the contract’s interest rate on the balance and the current market interest rate.

What happens if I do not accept the allocation?

If the saver rejects an offered allocation, they are generally placed back in the queue. However, the building society may, under certain circumstances, terminate the contract for cause following repeated rejections. The exact regulations are set forth in the General Terms and Conditions of the respective building society-anyone wishing to decline an allocation should check this in advance.

How long does it typically take to become eligible for allocation?

With regular savings at the agreed-upon level, it typically takes seven to twelve years for a building savings contract to become eligible for allocation. Higher contributions or special payments can help reach the minimum savings amount faster-however, the valuation figure and minimum term remain fixed parameters that cannot be accelerated by additional payments alone.

What is the difference between being ready for allocation and actual allocation?

Being ready for allocation means that the contract meets the requirements and is, in principle, ready for allocation. The actual allocation takes place when the building society has the necessary capital available in its allocation pool. There can be a waiting period of several months to two years between becoming eligible for allocation and the actual allocation-depending on the demand situation at the respective building society.

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