Table of contents:
- When do building societies cancel older contracts?
- Why is the BGH judgment in the sense of the building society collective?
Can building societies terminate long-term building society contracts with high interest rates? The judges of the Federal Court of Justice (BGH) have now decided in favor of the building societies on this question.
Building societies may terminate building society contracts if customers have not used the loans ten years after the so-called allocation maturity. The Federal Court of Justice decided this in two proceedings against Bausparkasse Wüstenrot (file number XI ZR 185/16 and others).
The supreme judge's reason: The purpose of saving is to be eligible for a loan. This goal is achieved as soon as the building society contract is ready for allocation. Depending on the tariff, a home savings contract is ready for allocation if 40 to 50 percent of the home savings sum has been saved.
When do building societies cancel older contracts?
Building societies terminate older contracts where the purpose of building savings no longer plays a role. There are building society savers who are no longer interested in a home loan, but would like to benefit as long as possible from the high interest rates on their old contracts for today's conditions - also because investment alternatives are lacking in this unnaturally low interest rate situation. This is understandable from the customer's point of view, but contradicts the core idea of building savings: saving in the community to obtain a low-interest loan.
Why is the BGH judgment in the sense of the building society collective?
The home savings contract is not designed as a savings contract with an unlimited term, but secures the medium-term entitlement to an interest-saving home loan. If this is not used - which is often the case in view of the current low interest rate phase - the home savings contract cannot be used indefinitely like a normal savings contract. With the terminations, the building and loan associations maintain the balance between credit and loan interest in the building society savings system. This balance is severely affected by the European Central Bank's zero interest rate policy. The BGH judgments stabilize the building society savings system and thus serve the interests of the vast majority of building society customers who are not affected by the contract terminations.