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How to get a mortgage in Germany

govesta hypofriend

It’s a great time to get a mortgage in Germany. Interest rates are very low, while property prices have been steadily increasing for more than 10 years. But if you’re looking to get a mortgage in Germany, where should you start? This article will provide some useful context on the German mortgage process and take a look at the various options available for obtaining a mortgage in Germany.

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 decreases and the loan repayment increases.

Can foreigners get a mortgage in Germany?

Unlike some other countries, Germany has no restrictions for foreigners who want to buy property. So even non-residents and non-EU-nationals can purchase German properties. When it comes to getting a mortgage in Germany, you’ll need to verify whether or not you are eligible to take out a loan. The regular factors apply, such as having a stable income, enough savings for property purchasing fees (Eigenkapital), and a healthy SCHUFA score.

How to get started with your German mortgage

Traditionally people used to go to a bank to get a mortgage. But nowadays there are so many options that it can be confusing where to start. Luckily there are many online platforms and experts that can guide you through the process, and all in English as well. These brokers have access to the entire mortgage market so they can find a deal that’s right for you. The best thing is that they are all free, as they are paid a commission from the banks. Let’s take a look at some of your options.

Hypofriend & Loanlink

These two companies are both based in Berlin and use technology to simplify and automate the process of getting a mortgage in Germany. Enter your email and answer the automatic questions generated on their websites. The information is then fed into a recommendation engine which compares different situations over time and recommends the optimal mortgage product for you. The technology means you can check what you can afford, apply online and upload and verify your documents without having to meet anyone in person.

Your German Mortgage

Owned by MLP, a well-established company that takes care of all financial matters, Your German Mortgage also offers an online calculator, so you can easily check what mortgage you can afford. Best of all you can use this without giving any personal user data, which is quite a big topic in Germany. They won’t store your IP-address or your email and so they can’t connect your calculations to your person. That’s perfect if you just want to get an idea of what you can afford, without going further into the process.

In addition, Your German Mortgage collects interesting real estate data, on a district level, for each metropolitan region of Germany. Their data helps you better understand the property market and make the best investment possible. Finally, they have a certified financial advisor in each major city in Germany. So, if you prefer face to face meetings, they have you covered.

So what is the best option?

To get a mortgage in Germany, the best option is to go through a savvy broker, like the ones above. They have access to more than 400 banks and institutions that could potentially finance your purchase. Therefore, they have the best connections in the market will be able to find you the right plan. Check out their websites and go fo the one you like the most!