Living in Spain, buying in Düsseldorf: €357,000 for a let flat
When Mr and Mrs M. found their dream flat in Düsseldorf, they were convinced they had already put the hardest part behind them. For almost ten years they had lived on the Spanish Costa Blanca, working there successfully and building up solid assets. The flat in Germany was not to be a holiday home, but a long-term investment for their retirement. This is a non-resident mortgage case: the financing comes from a German bank.
Why did three banks reject the let flat while the buyers lived in Spain, and how was it solved?
Three banks gave a single reason: residence in Spain, not creditworthiness, price or equity, as their guidelines were designed for clients living in Germany. We first checked which banks regularly handle financings for Germans living in Spain and presented income structure, tax residence, assets, equity and household budget before submission. The commitment followed a few days later.
What was the starting situation?
Equity was available. Both had permanent employment contracts. There were no negative SCHUFA entries, no ongoing loan defaults and an excellent household budget.
Even so, they received three rejections within a few weeks.
Not because of their creditworthiness.
Not because of the purchase price.
Not because of a lack of equity.
The only reason given was: residence in Spain.
Mr M. works as a technical project manager at an international company based in Alicante. His wife is a commercial employee at a Spanish trading company. Both receive their income in euros and pay tax on it fully in Spain.
For their retirement provision they want to acquire a let flat in Düsseldorf.
The key financing figures:
- Purchase price: 425,000 euros
- Transaction costs: around 42,000 euros
- Equity: 110,000 euros
- Financing required: 357,000 euros
The property is in a sought-after residential location with good lettability and long-term stable prospects.
A financing, in fact, that appears unproblematic at first glance.
Why did their own bank reject?
Because of the tax residence abroad, despite a long-standing client relationship.
Hopes were high, after all there was a long-standing client relationship.
The answer came surprisingly quickly.
A financing was unfortunately not possible because of the tax residence abroad.
There was no further explanation.
Two further banks also rejected the application after a pre-check.
Some institutions do not finance non-residents on principle.
Others require conditions that could not be met in this specific case.
For many applicants this creates the impression that financing in Germany is fundamentally ruled out with a residence abroad.
That, however, is not true.
Where did the real problem lie?
In internal lending guidelines, not in creditworthiness: many banks have standard processes designed for customers living in Germany.
What was decisive instead were internal lending guidelines.
Many banks have standardised processes designed for customers living in Germany.
As soon as income, tax liability or residence move abroad, the effort involved in the assessment rises considerably from the point of view of these institutions.
This includes, among other things:
- Checking foreign proof of income
- assessing tax particularities
- additional documentation requirements
- internal risk management requirements
- different requirements regarding equity and loan-to-value
The result: it is not uncommon for a blanket rejection to be issued at the outset, even though the financial requirements are excellent.
What was the strategy?
Instead of making further financing enquiries at random, it was first checked which banks regularly handle financings for Germans living in Spain.
Before submitting the documents, all the particulars were presented transparently.
These included:
- income structure
- tax residence
- an asset overview
- proof of equity
- property documents
- a household budget
This gave the financing institution a complete picture of the economic situation from the outset.
After the pre-check, positive feedback followed.
A few days later the financing commitment was in place.
The financing concept: The financing was designed for long-term stability.
Besides the available equity, sufficient liquidity reserves were kept in order to cope easily with future maintenance or unforeseen expenses.
The expected rental income was included in the overall assessment too.
The result was a sustainable financing that met both the bank's requirements and the couple's long-term goals.
What can other Germans abroad learn from this case?
A residence in Spain is not an exclusion criterion for a property financing in Germany.
What is decisive, rather, is whether the bank enquired at has experience with international financings.
Many applicants lose valuable time through rejections from institutions whose internal guidelines fundamentally do not provide for such financings.
Anyone who selects the right financing partners from the outset and prepares their documents completely considerably improves the prospects of success.
For non-residents in particular, it is often less the interest rate than the financing bank's experience with cross-border matters that decides.
This case shows that a rejection by individual banks does not mean that a financing is fundamentally impossible.
For Germans living in Spain in particular, banks' lending guidelines differ considerably. While some institutions rule out such financings on principle, others have many years of experience with international income and tax situations.
Anyone who relies early on specialised financing partners and prepares their documents professionally can successfully invest in German property even while living abroad.
Frequently asked questions
Can I finance a property in Germany while living in Spain?
Yes. Numerous banks offer such financings. However, the requirements differ considerably from lender to lender.
Does my income have to be earned in Germany?
No. Income from Spain can in principle be taken into account too, provided it can be documented in a comprehensible way.
How much equity is needed?
That depends on the respective bank and the financing constellation. A solid equity ratio regularly improves the financing options.
Are German accounts required?
Not necessarily. Many banks, however, want a German reference account or set up a suitable account as part of the financing.
Does processing take longer than a standard financing?
Depending on the documents and the bank, the review may take a little more time. Complete documentation speeds up the process considerably.
A similar situation? Let’s talk.
Every case with an overseas link is its own. In a free initial call we will tell you honestly what is feasible and which bank fits.
Anonymised individual case, not a guaranteeable statement for other projects · advice free · commission, as a rule, paid by the bank · §34i GewO · not legal or tax advice · no financing commitment; conditions depend on creditworthiness, lending value and bank
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Editorially responsible: Olga Nikushkina — owner, §34i GewO (German mortgage brokerage), adviser register D-W-132-ZUCB-95. Specialised in German property financing with an international dimension: non-residents, foreign-currency income, cross-border workers, expats. Siegfried Perini is entered in the German intermediary register under this licence as a person directly involved in brokerage and advice (§ 11a GewO), active in real estate since 1992. Not legal or tax advice.
