Building Savings Loan

The building savings loan is provided by building societies where the client has a savings account (so-called building savings).

Purpose of savings loan

Purpose of savings loan

Building savings loan (also called classic or regular) is the original product of savings banks associated with the building savings itself. Due to state support to the building savings client (up to USD 2,000 per year), the loan is limited by various conditions.  The building savings loan is purpose-built. The purpose of the building savings loan is to address housing needs with an advantageous interest rate, which remains constant throughout its repayment period.

The amount of the building savings loan is determined by the difference between the target amount and the balance of the building savings account (ie deposits and state support for the entire savings period) and can be provided after meeting the set conditions.  If someone wants to borrow for housing and does not need a large sum, they do not have to take out a mortgage, pledge a property and do not have a guarantor thanks to a building savings loan.

Building society loans

Building society loans

Building societies provide essentially the same as mortgage banks. That is, to buy real estate, build, reconstruct housing or refinance a loan.

Generally, it is necessary to distinguish generally building society loans and already specific building savings loans.

The building society loan package includes:

  • building savings loans
  • bridging loans

If someone wants to borrow for housing, they are already saving and do not need a large sum, they do not have to take a mortgage, stop a property and prove their creditworthiness thanks to a building savings loan. Building savings client can do without a guarantor.

An important element in building society loans is the so-called evaluation number. It is an indicator that each savings bank sets differently. For example, the savings period, the amount of the saved amount and the target amount play a role in calculating the value of the evaluation number.

How to achieve a loan from building savings

How to achieve a loan from building savings

In order to draw on a building savings loan, the applicant must meet several conditions :

  • save at least two years
  • save at least part of the target amount (often 40% or 50%)
  • to reach the minimum value of the so-called evaluation number

When drawing on a building savings loan, the building society will provide the loan up to the target amount. Interest is fixed and guaranteed throughout the repayment period. With what interest the building society will lend to the applicant, the client must know at the moment of establishing the building savings. The conditions are specified in the contract on building savings itself.

According to the law, the building savings loan can be repaid at any time and without sanctions. However, the bridging loan cannot be repaid early.

Advantages and disadvantages of building savings loan

Advantages and disadvantages of building savings loan

As mentioned above, a building savings loan can be taken if several conditions are met. Here it is necessary to consider in which case it is advantageous and when not.


  • it is not necessary to prove income
  • the loan can be paid at any time and without penalty
  • without mortgage
  • same interest rate of the whole repayment


  • need to save at least 2 years
  • have saved min. 40% of the target amount
  • higher interest rate than mortgage and bridging loan
  • sometimes the need to have a guarantor or take out life insurance

As with all types of loan, it is necessary to think about the advantages and disadvantages of this loan in advance (even before the building savings contract itself). The building savings loan calculator, which can also be found on the building societies website, is used to improve the notion of building savings loan.

When does a building savings loan, a bridging loan and a mortgage pay off?

When does a building savings loan, a bridging loan and a mortgage pay off?

Building savings loan pays off when a person is planning a small renovation or modernization of housing or needs a smaller amount to buy a property.

However, if the applicant saves less than 2 years, it is appropriate to consider a bridging loan or mortgage loan. The restrictive conditions of the building savings loan mean that the savings banks with bridging loans have been able to respond flexibly to the clients’ current needs.

Bridging credit

This loan is also linked to the building savings contract, but the applicant can get it almost immediately after the contract is concluded. It also reaches the state aid, which is credited in the phase of the bridging loan for still running building savings. There is also no real estate pledge ; lower loans do not require proof of income. However, for secured property loans, the applicant has a chance of longer maturities and lower rates.

Some building societies also offer a bridging loan action for free. The fee for maintaining a credit account is almost always, also for building savings account. Sometimes there may be an obligation to take out life insurance.

The main disadvantage of the bridging loan is that interest is repaid on the entire amount borrowed and that interest is not reduced over the entire duration of the loan. Part of the loan repayment goes to pay interest and part of the savings to the building savings account. This pays interest on something that would already be paid for a building savings loan or mortgage.

The bridging loan cannot be refinanced or reimbursed free of charge (there may be exceptions for non-secured real estate loans). Some building societies allow for payment only in cases of divorce or death, but with high fees.

A bridging loan is a good option if, for example, the applicant wishes to buy a cooperative apartment that will not pass into private ownership in the foreseeable future and will not have the property pledged.

Mortgage loan

Another alternative to a building savings loan is a mortgage. Thanks to the lower interest rate, the mortgage is a popular solution. However, if the applicant wants to take out a mortgage and cannot guarantee real estate, he / she will not receive the mortgage (eg reconstruction of a rental apartment that will not be transferred to private ownership within two years). The mortgage loan is suitable for a larger amount borrowed, but the lower amount (eg below USD 200,000) will not be obtained by the applicant.

A mortgage, unlike a building savings loan and a bridging loan, is secured by real estate, which can be disadvantageous. On the other hand, the mortgage can be refinanced or paid for early on free of charge. Keeping a mortgage loan account is free and some banks offer a free property estimate.

Although the mortgage is usually the first choice, not every applicant can reach it. Refusal may be mainly lower income applicants, probationary or fixed-term employees and start-ups. For entrepreneurs there are business loans or loans for start-ups.

Providers of building savings loans

Providers of building savings loans

In the table of providers of building savings loans you can see Czech providers of building savings loans. Amounts that can be borrowed are shown without the need to secure a property loan. The savings banks offer also a loan with higher amounts, but with collateral.

For the most advantageous building savings loan, each applicant should use a non-binding calculator of building savings loan before negotiating building savings. Although there are only a few building savings banks on the Czech market, relatively favorable conditions for building savings and subsequent loans can be obtained.

Currently, building savings loans offer lower interest rates than mortgages. It pays much more than a home loan.

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