Getting a Mortgage in Germany: A Simple Step-by-Step Guide [Expat Friendly]
- Barbara Okwufulueze
- Nov 30
- 6 min read
Buying a home in Germany usually means taking out a mortgage, called a Hypothek or Baufinanzierung. As an immigrant, you can get one, but banks will look very closely at your situation. The entire process can feel overwhelming, especially for expats unfamiliar with the local mortgage system. Understanding how to qualify for a mortgage, what documents you need, and the steps involved can make the process much smoother.
This guide breaks down everything you need to know in clear, straightforward language, helping you take confident steps towards owning property in Germany.
Understanding the German Mortgage Landscape
Germany’s mortgage market differs from those in many other countries. Mortgages here tend to have longer fixed-rate periods, often between 10 and 15 years, which can provide stability in monthly payments. However, the application process is thorough, and banks expect detailed documentation.
Who Can Get a Mortgage in Germany?
Expats can qualify for mortgages, but banks usually require proof of stable income and residency status. Both EU and non-EU citizens can apply, but non-EU citizens may face stricter requirements or need a larger down payment.
Legal rules:
— Can non-EU citizens own property?
German law does not restrict property ownership by nationality. As a non-EU citizen, you can buy:
A flat
A house
A rental property
Even an entire apartment block
You usually go through the same purchase process as a German citizen: notary, transfer tax, registration and so on.
— Property and residence are separate issues
Owning a home in Germany does not automatically give you the right to live or work here.
You still need the correct visa or residence permit.
Immigration authorities will consider income, health insurance and other factors, not just property ownership.
Some residence routes may be easier if you can show strong financial ties to Germany, but buying on its own is not a guaranteed path to a visa.
Typical Mortgage Terms
Loan-to-Value (LTV): Usually up to 80% of the property value. Some banks may offer up to 90%, but this is rare.
Interest Rates: Fixed rates are common, ranging roughly from 2% to 4%, depending on the term and your creditworthiness.
Repayment Period: Typically 10 to 30 years, with many opting for 15-year fixed rates.
Step 1: Check Your Financial Situation
Before applying, carefully assess your finances. German banks look closely at your income, debts, and credit history.
Basic requirements for a mortgage
Most banks look for the same main points:
You have a valid residence permit that allows you to work.
You work in Germany or run a business here and are paid in euros.
You have a stable income (usually from an unlimited or long-term contract). Regular employment or self-employment income for at least 6 months is preferred.
Your monthly mortgage repayment is no more than about one-third of your net salary.
You can cover the equity part from your savings: You will need at least 20% of the property price as a down payment, plus additional funds for fees.
Usually, you pay 10–30% of the purchase price as a deposit.
Plus 8–15% extra for taxes and fees.
Having a good SCHUFA score makes approval much easier. Germany uses SCHUFA scores to evaluate creditworthiness. You can request your SCHUFA report online.
Financing as a non-EU resident
If you already live and work in Germany, banks may treat you similarly to other expats:
They will check your residence permit, income and SCHUFA.
You will usually need enough savings to pay closing costs and at least part of the purchase price.
If you live outside Germany, financing becomes harder:
Some banks prefer to lend only to residents.
You may need a bigger deposit (sometimes 30–40% or more).
You may have to work with specialist international lenders or brokers.
Buying in cash removes this problem, but of course, it requires a high capital outlay.
Work out how much you can afford
Start with your net income per month. German lenders normally cap your repayment at around 35% of this.
Build or check your SCHUFA
Banks will always check your SCHUFA report. A strong record with no unpaid debts helps you get:
Better interest rates
Higher borrowing amounts
If you are new in Germany, your SCHUFA file may be thin, but that’s normal. You can build it by:
Opening a German bank account
Paying bills (phone, internet, rent) on time
• • Avoiding overdrafts and missed payments
Step 2: Gather Required Documents
Having all the necessary documents ready speeds up the mortgage process. Commonly required documents include:
Valid passport or ID
Residence permit or visa
Proof of income (last three payslips or tax returns for self-employed)
Employment contract or business registration
SCHUFA credit report
Bank statements (last three months)
Property details (purchase contract, valuation report)
If you do not speak German, arrange for translation at the notary appointment. All parties must fully understand the contract.
Step 3: Find the Right Mortgage Offer
Shopping around is essential. Different banks offer varying interest rates and conditions. You can:
Visit local banks or savings banks (Sparkasse)
Use mortgage brokers who specialise in expat clients
Compare offers online using mortgage comparison websites
Use a mortgage broker vs. going directly to a bank
You can:
Go straight to your own bank, or
Use a mortgage broker (Finanzierungsberater), many of whom specialise in mortgages for expats.
Brokers compare offers from several lenders and can sometimes find better interest rates or banks more open to foreign buyers.
Tips for Expats
Some banks prefer applicants with permanent residency or German citizenship.
Consider banks with English-speaking staff.
Look for flexible repayment options if your income situation might change.
Step 4: From Mortgage Offer to Notary Appointment
The typical sequence is:
You find a property and agree on a price with the seller.
Choose a lender (usually a bank) and apply for a mortgage.
The bank will review your financial situation and the property details, and then you'll receive a binding financing offer.
The process can take from a few days to several weeks.
The bank may request additional information or documents.
The bank usually does a property valuation.
Mortgage Approval and Signing the Contract
If approved, you will receive a mortgage offer (Darlehenszusage) from the bank. Review it carefully, paying attention to:
Interest rate and fixed period
Repayment schedule
Fees and penalties for early repayment
You will sign the mortgage contract at the notary’s office, often at the same time as the property purchase contract.
The notary prepares a draft purchase contract.
You sign the contract at the notary's office.
The bank pays out the mortgage amount once all conditions are met.
Your name is entered in the land register (Grundbuch), making you the legal owner.
Tips for immigrants
Keep all documents translated if they are not in English or German.
Try to avoid frequent job changes in the months leading up to your application.
If you are on a temporary contract, a higher deposit can help.
• • Do not commit to a purchase until the bank has confirmed financing in writing.
Step 6: Final Steps and Property Transfer
After the notary appointment, the bank releases the funds to the seller, and ownership transfers to you. You must register the property in the land registry (Grundbuch).
Additional Costs to Budget For
Notary and land registry fees: Around 1.5% of the property price
Property transfer tax: Between 3.5% and 6.5%, depending on the federal state
Broker fees: If you use a real estate agent, typically 3% to 7% of the purchase price
Common Challenges for Expats
Language barrier: Many documents and contracts are in German. Consider hiring a translator or legal advisor.
Residency status: Temporary visas may limit mortgage options.
Income verification: Self-employed expats may need to provide more extensive proof of income.
A tax adviser who understands both German law and international situations is invaluable here.
Practical Example
Anna, a British expat living in Berlin, wanted to buy a flat. She worked full-time for two years and had a permanent residence permit. She saved 25% of the property price for the down payment. Anna gathered her payslips, SCHUFA report, and employment contract, then approached a local bank with English-speaking staff. After submitting her application, the bank arranged a valuation and approved her mortgage within three weeks. She signed the contracts at the Notary and completed the purchase smoothly.
Net salary: €3,000 per month
35% = €1,050 → that is roughly the maximum monthly repayment the bank will accept.
Then think about:
How long do you want to repay (20–30 years is common)?
Interest rate and any fixed-rate period.
Online mortgage calculators can give you a first idea before speaking to a bank or broker. With good advice and enough equity, Anna bought a home in Germany.
Final Thoughts
Getting a mortgage in Germany as an expat is achievable with the right preparation. Focus on understanding your financial standing, collecting the necessary documents, and choosing a lender familiar with expat needs. Take your time to compare offers and seek professional advice if needed. Owning property in Germany can be a rewarding step towards settling in your new home.
Comments