German real estate: can you release capital without a tied purpose?

What "without earmarking" means — and what it does not

Without earmarking means that a few banks lend against a residential property without the capital being tied to a purchase. Depending on the case it serves as free liquidity, for modernisation or to repay expensive loans.

Can I release capital against my property without proving the purpose? Yes — a few banks lend against a residential property without tying the capital to a purchase. Depending on the case that means free liquidity, modernisation or repaying expensive loans.

Usually paid off — with strong credit a second-rank charge works too

Usually the property is paid off. With very good credit a second-rank charge is also possible, likewise up to 80% of the lending value. Brokered on properties in Germany under §34i GewO. How the lending value is set.

Can I use equity release on German real estate without tying it to a property purchase? In many cases, yes — capital can be released from German real estate without tying it to a property purchase.

A few banks in Germany will mortgage a residential property up to 80 per cent of the lending value without tying the use to a property purchase — workable purposes include free liquidity, modernisation or redeeming expensive loans.

Requirements: a loan amount from around €150,000; normally an unencumbered property, with a very strong credit profile also as a second-ranking charge up to 80 per cent.

We know the few banks that do this.

In practice this means you mortgage property you already own — unencumbered or lightly charged — and use the capital freely: for a stake in a business, a modernisation, settling with co-heirs, or as equity for a later purchase.

The assessment follows the same rules as for a purchase: what counts is the lending value of the property, not your intended use.

Since only a few institutions offer this, choosing the right lender matters more than negotiating the rate.

In Germany, releasing capital from a property is not necessarily tied to financing real estate. But the market for it is small.

The norm at the counter: banks lend when you buy, build or modernise — residential use, preferably in Germany. Remove that field from the form and, at most banks, the whole case disappears. Not because the security is weak — because the lending policy does not provide for the case.

A few banks handle it differently: a residential property is mortgaged, and the use of the capital is not tied to a property purchase. In practice we see a range of purposes — free liquidity, modernisation, redeeming expensive loans. Which use works in a given case is something we clarify up front — before any application is filed.

The distinction: what if a property purchase is behind it after all?

If the capital is meant to flow into a property purchase abroad, that is its own well-trodden route — with the same lending limit, but a different narrative towards the bank, plus the Spanish or Portuguese financing on top: Release equity from your German property to buy abroad.

If the capital is to fund a property project in another euro country, that is a route of its own with its own figures: equity release for a purchase in another euro country — as a rule up to 50 per cent of the bank valuation, from around €500,000. The security there can be a German property too, but it is a different product from the equity release on this page.

Scope note: we broker the equity release on properties in Germany, under § 34i GewO. For competitive reasons, we name specific banks only within a mandate.

Frequently asked questions