Calculating your mortgage in Germany

Find out how much you can borrow

Calculating your mortgage in Germany

As an expat in Germany there is no restriction on your right to purchase property. For a mortgage, non-residents can generally borrow up to 55-60% of the property value. Official residents in Germany can borrow up to 80%.

Types of mortgages

The most common type of mortgage in Germany is a fixed interest loan (Annuitätendarlehen). It has a constant interest rate for a fixed period of time, generally between 5 to 30 years, with 10 years being the most common. At the end of the fixed payment period, the outstanding amount must be paid in full, or you can refinance with a new mortgage. During the term you can reduce the principle by up to 10% of the outstanding balance each year with additional payments (Sondertilgung).

There are other types of mortgages available, such as interest-only and variable rate: find out more here.

Crunching the numbers

To find out how much you can borrow, use a mortgage calculator  or enquire at local banks. The main factors which are taken into account by lenders are personal background, income and job status. Using a broker can help you find the best mortgage deal by taking into account your situation and their knowledge of what is on offer from different banks; they will also guide you through the mortgage application process.

Example loan calculation

You first need to determine how much capital (your equity) you have available. Then add 10-15% on top of the purchase price for a property to cover taxes and fees (the amount depends on where the property is located). Taxes and fees include:

  • Notary and land registry fees
  • Stamp duty (real estate tax)
  • Real estate agent fees

The next step is to review your income and spendings and decide what credit rate you can afford each month. Let’s say you are comfortable contributing €900 per month and are granted a 10 year loan with a fixed interest rate of 2%, paying off the debt with 3.45%. The monthly payment of €900 remains constant, with the interest portion decreasing and the loan repayment increasing over time.

After 10 years, you would then have to pay the remaining amount of €122,731 or refinance with another mortgage.

Put your own figures into a mortgage calculator  to get a quick answer.

Further reading

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