Due to a combination of attractive housing prices and favourable lending terms, Germany is a darling among foreign investors who wish to buy property using mortgage loans.
Foreign mortgage loan terms in Germany (November 2016)Source: Tranio
|Maximum LTV ratio||60%|
|Minimum loan amount||€50,000|
|Minimum age of borrower||18|
|Maximum age of borrower
by the end of the loan term
|Maximum percentage of monthly
income for mortgage
Basic documents required to obtain a mortgage loan in Germany include:
- passport copy
- filled in “Selbstauskunft” questionnaire
- real estate documents containing basic property information and photos. Banks are more willing to provide loans in the event that the property has been or will be rented out. In such cases the bank requires a rental agreement
- extract from the Land Register (issued no less than six weeks in advance)
- certificate of employment and latest tax return. If the purchased property has been leased out, 75% of the rental fee minus utility fees (Kaltmiete) is added to the income amount
- information about monthly expenses (other loans, rentals, utility payments, alimony, etc.)
- confirmation of equity available.
Legal entities wishing to obtain a mortgage must also submit balance sheets for the two previous years, their latest tax return and a business evaluation known as a Betriebswirtschaftliche Auswertung.
All documents must be translated into German and notarised.
Loan applications usually take
Additional mortgage costs in Germany (November 2016)Source: Tranio
|Property appraisal and due diligence||
free for property valued
|Property insurance||About €150 per annum|
|Mortgage arrangement fee||1% of the loan amount|
|Early repayment penalty
(not applicable to floating rates)
|0.5% of the remaining debt|