A good tip for everyone who has completed construction financing for their own home: As a property owner, you can also repay your home loan using your Riester contract.
A Riester contract is therefore a good method to at least partially repay a house loan and thus reduce the debt burden and interest payments.
What conditions does the Riester contract have to meet?
In principle, anyone who owns a Riester contract can also use it to repay an existing loan contract, i.e. also to repay a real estate loan.
The following conditions must be observed:
- The Riester contract must generally allow removal
- The yield on the contract should be lower than the interest on the building loan
- The loan must include a special repayment clause
- The assets of the Riester contract must include at least USD 3,000 after removal
Real estate loans are applied. For example, loans for modernization measures cannot be repaid in this way.
Here too, however, it depends on the individual case. A conversation with the personal advisor is always recommended.
Conditions of the respective loan contract
It only makes sense if the loan interest is higher than the return on the Riester contract. The prerequisite for this is the possibility of special repayments specified in the loan agreement. If this is not the case, the loan cannot be repaid with a Riester contract.
- In addition, it should be noted that the respective Riester provider generally makes the condition that at least 3,000 USD remain. This is to avoid the creation of small amounts that the provider no longer earns.
Even if the contract should continue to exist, this limit of 3,000 USD applies. In addition, the agreed notice periods of the Riester contract must be observed.
Documents and the further process. As soon as the application is approved by the office, payment of the amount can be requested to the credit account.