Mortgage loan in Germany: conditions, interest rate and banks

Acquisition of real estate in Germany is a profitable investment option or just housing solutions. The stability of the housing market and the economy as a whole, low interest rates are attractive factors, including for foreign investment. Let us consider in more detail the conditions on which mortgages are issued in Germany for Russians, and we will also analyze offers from leading German banks.


What is profitable loan in Germany for the Russians

Today, the residential real estate market in Germany is characterized by an excess of demand over supply, which generates a steady increase in prices. Now it is quite difficult to find a good apartment or house at the stage of completion. Most offers are sales at the stage of planning or commissioning of the object in 2-3 years (off-plan).

The question “Is it profitable to draw up a mortgage in Germany?” Is not worth it now. The answer is too obvious.

Mortgage registration for Russian citizens will be beneficial for the following objective reasons:

  1. High quality construction in Germany (the Germans are extremely scrupulous about all technical and construction standards and use only high-quality materials).
  2. Low interest rates (over the past decade, the level of mortgage loan rates reached its historic minimum and averaged about 3-5% per year for non-residents of the country).
  3. Loyalty to customers who buy expensive housing (if the borrower plans to buy real estate in Germany worth more than 100 thousand euros, then there is a high proportion of the likelihood that the bank will meet it and soften the requirements and offer minimal costs).
  4. The possibility of the subsequent delivery of an apartment / house for rent (since rental rates in Germany are high and constantly increasing, obtaining a stable income from tenants will compensate for the costs of paying the debt to the bank).

Conclusion! Making a mortgage loan in Germany for the Russians is available even in a situation of difficult relations between countries. The main factors that increase the likelihood of approval of a loan application for the bank are creditworthiness, stable employment and the possibility of paying a down payment.


Percentage and conditions of the mortgage

Conditions for obtaining a mortgage in Germany for foreigners include the following options:

  • interest rate – from 3 to 5% per annum;
  • down payment – at least 40% of the market price of housing;
  • loan size – from 50 thousand euros (not more than 60% of the value of real estate);
  • loan period – from 5 to 40 years (standard period – 10 years).

Some banks may require a deposit of at least 40% immediately in the form of a down payment on the mortgage, others – at least 50% of the price of the purchased housing. It all depends on the client’s compliance with the requirements of a particular bank, its credit reputation and the value of the property. Also important is the fact whether the acquired housing is primary or secondary for the client.

The borrower’s expenses include not only interest and the amount of the loan itself, but also additional costs for the purchase of real estate, including:

  • real estate tax (the rate varies from 3.5 to 6.5% depending on the location of the property);
  • fee for reissue to the new owner (0.5 – 1% of the transaction amount);
  • notary fees (1.5 – 3%);
  • commission to intermediaries (3 – 6% of the value of the house / apartment is received by brokers or realtors);
  • inclusion of a new homeowner in the land registry (0.5%);
  • loan processing fee (about 1%);
  • fee for the assessment of the potential object of pledge (approximately 1.5 thousand euros);
  • facility audit (0.5 – 1.5%);
  • miscellaneous expenses (bank account management, issuance of statements, certificates – up to 150 euros per year).

Important! In total, the property buyer with a mortgage must have at least 10 thousand euros in the case of the purchase of an object worth about 100 thousand euros.

Small percentage

Bank requirements to the client

Generally, banks check non-resident Germans in Germany for compliance with the following requirements:

  1. Borrower’s age limit is from 21 to 65 years.
  2. The presence of a valid bank account (opening an account and making a deposit on it must be made at least 2 years ago with a constant cash flow).
  3. Confirmed income in Germany (individuals must provide an income statement for the past six months, and the PI – at least 2 years).
  4. No tainted credit history.
  5. Having personal savings.

For banks, it is important that the client works in Germany and his income is sufficient to service the loans and ensure the current standard of living. The rule applies: a person must spend on loans no more than 35% of the income received per month.

The client’s personal income received by him in other countries is not taken into account by German banks, as there are significant difficulties in verifying the accuracy of the information provided.

Getting a mortgage step by step

Take a mortgage in Germany can people living and working in its territory. Step by step loan processing includes such steps as:

  1. Analysis of proposals from banks.
  2. Collection and preparation of documentation.
  3. Opening a bank account and its replenishment.
  4. The conclusion of the contract.

Let us examine each item in more detail.

Conclusion of an agreement

Offer analysis

To find the best option, the client is recommended to analyze and study at least 5-10 credit institutions and the conditions of the mortgage programs offered by them for non-residents.

When analyzing, one should take into account that the majority of German banks issue mortgage loans in the form of an annuity loan for 5, 10, 15 years, the rates for which are codified. Every 5 years, interest typically increases by 0.5 percentage points.

Here it is important to take into account the initial rate offered by the bank for the first year of crediting (Zincen), the annual repayment rate of the loan body (Tilgung) and the total amount of the monthly payment (Rate), as well as the possibility of early repayment of the loan body (Soldentilgung).

For a better understanding of the upcoming payments and loan servicing, it is better to consult with the bank manager and use the loan calculator.

As for real estate offers, you can find an object of interest for purchase through specialized firms, agencies, Internet sites or private ads. With their help, you can choose and buy:

  • family house (cottage);
  • two-family house (with neighbors);
  • house in a row;
  • a separate apartment in the property (including apartments in new buildings);
  • old house

Popular banks that work with Russian borrowers include Commerzbank, Sparkasse, Deutsche Bank, Raiffeisenbank, Volksbank and others.

Offer analysis

Preparation of documents

You will need to prepare the following set of papers in advance:

  • valid foreign and Russian passports;
  • application form;
  • bank statement on the availability of capital for the payment of the first installment with a reflection of operations for the movement of funds;
  • documents confirming the receipt of a stable income (at least for the last year);
  • documents for purchased housing (extract from the land register, housing charter);
  • real estate appraisal report (if ordered from independent experts).

The collected package of documents must be submitted to the selected bank for consideration of the mortgage application.

Opening a bank account and its replenishment

A Russian bank can open an account in a German bank only with a personal presence. There is no such service in remote access for foreigners in Germany. The operation itself is carried out upon presentation of foreign and Russian passports, as well as a document confirming the right to stay in the country and registration.

The account is opened in euros after signing the contract. You can replenish it immediately on the opening day (up to 10 thousand euros one-time per day). You can manage your account through your online banking account.


Conclusion of an agreement

Before obtaining a loan for housing, the buyer and the seller of the property enter into a contract of sale, which is certified by a notary. Immediately after its signing, the notary submits an application to the Land Court for the preliminary registration of the buyer as a new owner.

Then, after all the terms of the loan are agreed, the parties enter into a mortgage agreement. This document must contain the parameters of the loan to be issued (amount, term, interest rate), information on the property being purchased, the procedure for paying the loan and its maintenance, terms of termination of the contract, rights and obligations of the parties, details.

Mortgage agreement and encumbrance on real estate are recorded in the land registry.


Mortgage in Germany is not issued quickly. The average time to receive such a loan is usually at least one month. This term includes the process of preparing documents, consideration of the loan application by the bank and registration of the transaction itself.

Some banks have a reputation of institutions with a delayed decision-making period (up to 1-1.5 months from the date of appeal). Such a factor should be taken into account when concluding a sales contract with the seller and it is necessary to prescribe the maximum settlement period with a margin.


Term mortgage

German banks are ready to lend to foreign citizens, including Russians, for a period of 5 to 40 years. The average duration of debt repayment on mortgage in Germany is 10 years. It is during this period that the borrower can pay off the bank without much damage to the family budget.

In agreement with the partner bank, the borrower has the opportunity to extend the loan period in case of financial difficulties. Practice shows that many banks in such situations are going to meet their customers.

Life insurance

In order to reduce potential risks of non-payment of debt by borrowers, most German banks make a positive decision on a mortgage application only with the consent of the client to conclude a life insurance contract.

By purchasing personal insurance, the borrower will protect himself and his family members in the event of an insured event.

One of the varieties of such insurance is Risikolebensversicherung. Its essence is to conclude a contract for a fixed period during which the client pays annual fees, and after his death the family (during the insurance period) will receive the amount specified in the contract. If the insured event has not occurred, then the insured person has the right after the expiration of the contract to take the accumulated money immediately or receive them in parts, as a kind of pension increase.

Getting a home loan in Germany is available not only for its citizens, but also for non-residents. The country’s largest banks (Commerzbank, Sparkasse, Deutsche Bank, Raiffeisenbank, Volksbank) offer favorable credit terms: from 50 thousand euros for a period of 5 to 40 years at 3-5% per annum. Most mortgage loans are issued in the form of annuity loans with a fixed monthly payment. A Russian with sufficient solvency and stable work on the territory of the Federal Republic of Germany, who has own capital of at least 40% of the price of the acquired property, has a high chance of obtaining a mortgage in Germany on favorable terms.

You can also find out further about the mortgage in the Czech Republic and how the mortgage is issued in Spain for the Russians .

For issues of mortgage abroad and real estate purchase, you can contact our consultant in a special form. Be sure to prompt the desired option.

We are waiting for your questions and evaluation of the article.