This is essentially a home saving contract where participants of the program first pay into a common pool of money in a building society (Bausparkasse), which is a certain percentage of the required loan. Then the payments are given to people who already have a loan claim. Subsequent home savings then finance the mortgages of the predecessors. This is based on the pay-as-you-go system. You benefit from low and secure interest rate and guaranteed constant monthly installments. This program is supported by the German state.