There are no restrictions for non-nationals and non-residents to buy a property in Germany. In most cases, foreigners will have to take a mortgage with a German bank. Getting a mortgage from a European bank, while technically possible, is very unusual and difficult. But there are a good number of choices to get a mortgage with a German bank (called a Hypothek). This article walks you through the main types of mortgage in Germany for foreigners.

Disclaimer: ADEN Immo provides this content for your information only and has made every reasonable effort to be factually accurate based on our experience as real estate brokers. ADEN Immo disclaims any and all liability for damages incurred directly or indirectly as a result of errors, omissions or discrepancies.


How to get a bank loan/mortgage from a German bank?

You don’t legally need to be a resident to open a bank account in Germany. But non-residents usually get offered lower amounts, around 50% of the property price. This mean that you may need to pay up to 50% of the property upfront, which can be quite a sum! For German residents, the amounts differ in each situation, and banks will fund up to 80% of the property price.

The four largest banks in Germany are Deutsche Bank, Commerzbank, Postbank, and Hypovereinsbank. All of them offer mortgages, but it’s good to check the small print as each package differs slightly. Most banks also have an online mortgage calculator, which can give you a better idea of the interest rates and fees. Make sure to ask if they have an English-speaking counsellor to help you!


Making a downpayment

In the process of buying a property in Germany, once you have a clear project in mind, it is good to get a mortgage agreement ‘in principle’ from different banks. This will give you a better idea of what you can afford and will improve your profile in the eyes of sellers.

Foreigners are expected to provide a rather large part of the property price on their own. Most banks will ask for up to 50% of the property price upfront! Especially in large cities like Berlin, the government wants to reduce real estate speculation and encourage property sales for long-term residents, so they make financing more difficult for non-residents. If you are transferring your down-payment from a foreign currency, make sure to check your exchange options! Some external institutions (like TransferWise) offer interesting options to transfer money from one currency to another.


Taxes and fees

Keep in mind that in addition to the price of the property, the buyer will have to pay an additional 15% in fees and taxes. Most of these side costs are deductible from your income tax if your fiscal residence is in Germany. The side costs of a real estate transaction in Germany include:

  • Real estate transfer tax (Grunderwerbssteuer): depending on the federal state, these vary between 3.5 and 6.5% (6% for Berlin-Brandenburg)
  • Notary fees: around 0.5%
  • Registration fees (Grundbuch): around 1%
  • Real estate agent (Makler) fees: usually around 6% + tax, for a total of 7.14%
Graph showing the complete costs of a real estate transaction

Graph showing the complete costs of a real estate transaction


Types of mortgages in Germany for foreigners

Keep in mind that getting a mortgage with a German bank is a legally binding agreement. Failure to repay a loan may have hefty consequences, such as the repossession of the property by the bank. In Germany, individual credit scores are closely monitored (also known as the Schufa).

The German housing market barely suffered the 2008 financial crisis, probably because German banks are quite conservative with their lending policies for mortgage in Germany for foreigners. Both the property and the mortgage-taker are evaluated by the lender. They will look into your income, savings, and employment history (being self-employed or in a short-term contract could be obstacles). Age is also a factor (being close to retirement age is considered a higher risk).

Make sure to get offers from several banks and read the contracts with a legal expert before engaging into a mortgage. Last but not least – if you live in Germany and are a German tax payer – there are several state supported programmes that can come in useful should you wish to buy a property or build your own. Find out more detailed information in this useful article from How To Germany about mortgage for foreigners.

Curious about the transaction process of a property sale in Germany? Check out our complete guide to buying a property in Berlin as a foreigner!

Can anyone buy property in Berlin?

There are no special requirements or paperwork required for foreigners wishing to buy property in Germany, even for non-residents. Since the housing market was largely unaffected by the financial crisis of 2008, it is a stable and reliable opportunity to invest in real estate in Germany! Whether you are looking to buy your own home or find an investment opportunity (Kapitalanlage), this article will take you through the key steps of buying a property in Germany as a foreigner. Want to learn even more? Join one of the Meetups from ADEN Immo broker Hélène Salvanes held every month!

Disclaimer: ADEN Immo provides this content for your information only and has made every reasonable effort to be factually accurate based on our experience as real estate brokers. ADEN Immo disclaims any and all liability for damages incurred directly or indirectly as a result of errors, omissions or discrepancies.

Defining your project

The first question is: what is your project? What is your budget? And most important: where? Because the real estate market in Germany is growing strong, it is good to have several ideas for a location. If you are looking into the real estate market in the German capital, check out our “complete guide to buying properties in Berlin as a foreigner”!

Are you buying for yourself? Are there already tenants living in the property? German law is very protective of tenants, so if you are looking for a new home, the best is to find an unoccupied property. However, investing in real estate is also a good option since most people in the country are renting their homes (especially in Berlin, where close to 85% of dwellers are tenants and not home-owners!)

Remember to study the plans and see if there are possibilities for new configurations.

Consider renovations! Some apartments may not look like they will fit your project at first. Maybe there are not enough rooms, or the bathroom is not functional… But with some imagination it might become your dream home! A 2-room 90sqm apartment can easily be turned into three rooms if the layout allows it. So take some time to look at the plans and make sure to double check the actual surface of the property with the plan.


Finding properties in Germany

Give yourself time! Most Germans who buy a property typically stay for a long time. In attractive areas, the turnover can be quite low, which means you will need at least a few months to find a home you like.

So how to find a property for sale in Germany? Properties can be sold either through a private person or through a real estate agent (the Immobilienmakler, or simply Makler). It is usually the task of the buyer to find a property they like and then contact the sales agent or the owner directly. If there is an agent, it is important to find out who will pay the costs of that intermediary! Fees are usually 6% of the property price plus taxes (for a total of 7.14%). You can check the background and reliability of a Makler through the IVD, the national association of German realtors.

Properties may have a notice board in the window advertising that they are for sale, but this is not always the case (and hard to spot!), so the most comprehensive way to search is either through agencies or through online portals. As in most European countries, you can find ads for real estate online. The main ones that can help you buying real estate in Germany as a foreigner are:

Ebay kleinanzangen

Don’t forget to create email alerts and check the platforms every day! If you don’t have time, consider hiring a real estate agent who will conduct the search for you and tap into their exclusive databases to find good options for your project.

Before asking for visits, make sure to examine the plans of the apartment carefully: it could save you the time of a visit and some disappointments! If you don’t live in Germany, it could still be a good idea to make the trip before signing a sale contract: meet the agents, meet the owners, find a notary, get a feeling for the place… 

Curious about the transaction process? Wondering about the fees and charges that the buyer will have to pay when buying a property in Germany? find out more in our complete guide to buying a property as a foreigner in Germany!

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