How to get a mortgage in Germany

Many expats living in Germany, after a few years or so, find themselves considering a permanent residence. They are interested in transitioning from an expat to a true Berliner and ready to take the plunge to purchase property in Germany. This is no wonder. In recent years, mortgage rates are extremely low while rental prices are increasing at a rapid rate. With the help of Hypofriend, Germany’s digital mortgage broker, we’ve mapped out the fundamentals of how to get a mortgage in Germany.

What is a Mortgage

First things first, what is a mortgage. Before we dive into the specifics of mortgages in Germany, we’ll brush up on the basics. A mortgage, or mortgage loan, is a formal contract between either the buyers of real estate or alternatively the owners of existing real estate using liens for raising funds. The mortgage itself includes the terms and conditions of the contract and also important factors such as the interest rate, the interest period, and repayment schedule. In this article, we will focus on you, the buyer.

How do Mortgages in Germany Work

Although there are many different types of mortgages in Germany, the most common loan used today is the annuity mortgage or Annuitätendarlehen. This is a fixed interest rate mortgage that typically has a payment period ranging from five to 30 years. Initially, the payment goes mostly towards the interest and a smaller amount goes to the actual loan. This is balanced out over time as the interest payment will decrease and the loan repayment portion increases.

Do You Qualify for a Mortgage in Germany

One of the main reasons why it is so attractive for expats or international investors to buy property in Germany is that there are no restrictions on foreigners. Regardless of your status, even if you are a non-resident or EU national, you are qualified to purchase German properties. When it comes to getting a mortgage in Germany, its best to first apply to verify whether or not you are eligible. However, it is important to know that factors such as having a stable income, enough savings for property purchasing fees, and a healthy SCHUFA score all affect your eligibility.

Can You Afford a Mortgage in Germany

Are you currently on the hunt to purchase a property in Germany? A good first step in your property search process is to verify what you can afford. Mortgages are determined by your income. Once your financials are determined, you can search for the best properties and mortgages that suit you. With Hypofriend, you can get a free online mortgage recommendation within minutes. They have simplified the once daunting lending process into the shortest path to buying a home in Germany.

Find the Right Mortgage with Hypofriend

Put your right foot forward in the buying process when it comes to mortgages in Germany with Hypofriend. Their experienced experts will advise you on the most important questions when purchasing a property in Germany. This will leave you with more time to find your dream home with Govesta.