Challenges of securing a mortgage

Potential obstacles for expats in Germany

Expats in Germany can get a mortgage, but there are some aspects of the German system that can cause a few difficulties. Here are four obstacles you could face when trying to get a mortgage.

Challenges of securing a mortgage

Residency status

Your residency status affects the amount you can borrow. Generally, banks will only lend temporary residents around 60% of the property purchase price compared to 90% to permanent residents and citizens (not including additional costs, such as notary and estate agent fees). So, if you’re a temporary resident you’ll need to have a lot of cash set aside for a downpayment.

Blue-card holders can also get a mortgage but there are specific requirements.

Working status

If you do not have a permanent work contract, your mortgage application could be rejected. This is not certain, as other factors are considered (e.g. occupation and income), but expats should be aware of this possibility.

Self-employed expats can secure a mortgage but you will have to provide extensive proof of income, including tax and accounting records for the last three years. Any source of income from outside Germany (especially non-euro income) will be particularly scrutinised.

SCHUFA report

Everyone applying for a mortgage in Germany must demonstrate proof of a stable banking history. Lenders will contact SCHUFA (Germany’s credit information agency) and request a credit report, but as an expat you may not have a record with SCHUFA yet.

If you don’t have a SCHUFA record, the bank will require you to contact your home country’s credit reporting agency or demonstrate proof of a stable banking history in another way.  

Language barrier

Discussing mortgage options and your application with banks will be a lot harder if you don’t speak German. To ensure you understand all the details of your potential mortgage, it’s a good idea to use an english-speaking mortgage broker like LoanLink . Experienced at advising expats, they can help you overcome the obstacles to make sure you secure the mortgage you want.

Residency status

Your residency status affects the amount you can borrow. Generally, banks will only lend temporary residents around 60% of the property purchase price compared to 90% to permanent residents and citizens (not including additional costs, such as notary and estate agent fees). So, if you’re a temporary resident you’ll need to have a lot of cash set aside for a downpayment.

Blue-card holders can also get a mortgage but there are specific requirements.

Working status

If you do not have a permanent work contract, your mortgage application could be rejected. This is not certain, as other factors are considered (e.g. occupation and income), but expats should be aware of this possibility.

Self-employed expats can secure a mortgage but you will have to provide extensive proof of income, including tax and accounting records for the last three years. Any source of income from outside Germany (especially non-euro income) will be particularly scrutinised.

SCHUFA report

Everyone applying for a mortgage in Germany must demonstrate proof of a stable banking history. Lenders will contact SCHUFA (Germany’s credit information agency) and request a credit report, but as an expat you may not have a record with SCHUFA yet.

If you don’t have a SCHUFA record, the bank will require you to contact your home country’s credit reporting agency or demonstrate proof of a stable banking history in another way.  

Language barrier

Discussing mortgage options and your application with banks will be a lot harder if you don’t speak German. To ensure you understand all the details of your potential mortgage, it’s a good idea to use an english-speaking mortgage broker like LoanLink . Experienced at advising expats, they can help you overcome the obstacles to make sure you secure the mortgage you want.

Does this article help?

Do you have any comments, updates or questions on this topic? Ask them here: