German mortgage interest rates and mortgages for foreign income: the wiki for buyers with an address abroad
In-depth explanations of the key topics — with references to real, anonymised case studies. Short definitions can be found in the glossary; here, we go into greater depth.
What does the FP Wiki say about mortgage finance and overseas finance?
The wiki explores the key topics relating to property finance, overseas financing and property purchase in depth, ranging from common misconceptions to tax issues when moving abroad and limited tax liability, right through to practical financing terms such as follow-up financing, building society savings schemes (Bausparvertrag) and purchase financing. Brief definitions can be found in the glossary; here, we go into greater depth.
What are the benefits of making an unscheduled repayment?
An additional, unscheduled repayment – often contractually permitted up to a certain annual percentage – saves on interest over the term of the loan.
What is a full repayment mortgage and when is it worth it?
A full repayment mortgage is repaid in full by the end of the fixed-rate period — no outstanding balance, no need for a follow-up mortgage, but with a higher monthly instalment than with a traditional annuity mortgage, which leaves an outstanding balance at the end of the fixed-rate period. It is worth considering if the higher instalments are affordable and if your priority is planning certainty without the risk of interest rate fluctuations at the end of the fixed-rate period. Full repayment loans in detail.
I own a property abroad and want to take out a mortgage on it to buy a property in Germany. Is this possible, and who offers this service?
Yes, but the process is more restrictive than raising capital in Germany: As a rule, only an unencumbered (paid-off) property can be used as collateral; loans of up to 50 % of the valuer’s estimate are common, the funds are earmarked for a specific purpose, and very few banks offer this type of arrangement to non-residents at all. Explained in detail using Spain as an example: Taking out a loan against a debt-free house: a mortgage on your property in Spain.
How much do the ancillary purchase costs (property transfer tax, notary, estate agent) amount to in each federal state?
Real estate transfer tax is the item that varies most significantly from one federal state to another — in 2026, ranging from 3.5 % in Bavaria to 6.5 % in Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein; most of the other states fall within this range, at between 5.0 and 6.0 %.
Notary and land registry fees are largely standardised across the country at around 1.5 to 2 %, whilst an estate agent’s commission (if agreed) is usually 3 to 7 % plus VAT. In total, these amount to 8 to 15 % of the purchase price. The full breakdown, including all 16 regional rates: Ancillary purchase costs in detail.
How much will the real estate transfer tax be in my federal state in 2026?
Between 3.5 % (Bavaria, the lowest rate) and 6.5 % (Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein, the highest rate) — the location of the property is what counts, not your place of residence. An overview of all 16 state rates: ancillary purchase costs in detail.
I have inherited a property that is free of encumbrances — how do I use it as security for a new purchase, and who can help with this?
A debt-free inherited property is the best starting point for raising capital without any restrictions on its use: the bank registers a new mortgage and pays out up to 80 % of the mortgageable value as freely available funds — which can also be used as equity or as part of the financing for a new purchase.
The loan amount should be around €150,000 or more; only a few banks offer this purpose-free lending at all, because most institutions only finance residential use. Raising capital without a tied purpose in detail.
Common concerns
Each page clarifies a common misconception or technical term and refers to real, anonymised case studies as well as related terms in the glossary. The glossary contains brief definitions; here, we go into greater depth.
The target audience comprises tax non-residents, Germans living abroad, investors and doctors who are facing a specific financing decision and are seeking reliable, professionally verified answers — rather than relying on opinions expressed on forums or generalised statements that do not take their individual circumstances into account.
Myth: You cannot buy property without a German passport
A widespread misconception that unnecessarily puts off many potential buyers: there is no rule in Germany that ties the purchase of property to German citizenship.
Myth: Deregistration ends your tax liability
Deregistering with the Residents’ Registration Office (Einwohnermeldeamt) is a formal administrative procedure – it has no tax implications in itself.
Myth: There are no tax benefits associated with property
This statement only applies to owner-occupied property.
Procedure & Process
Additional costs associated with a purchase
Additional purchase costs are on top of the purchase price and are covered by equity, not included in the mortgage — if you factor them in realistically from the outset, you’ll avoid the most common cause of a funding shortfall just before the appointment with the notary.
Financing Process
A mortgage follows a clear, predictable roadmap — if you know the individual steps, you can eliminate much of the uncertainty that would otherwise accompany this process.
Documents required for financing
The bank checks three things — the applicant, their income and the property — and requires separate documentation for each of these three areas.
Initial consultation (30 minutes) on financing
The initial consultation is a no-obligation, approximately 30-minute introductory meeting — a low-threshold first step before investing time in paperwork or selecting a specific bank.
Creditworthiness & Equity
Equity ratio
The equity ratio is the proportion of total costs that buyers cover from their own funds — it is a key factor in determining whether a bank will provide financing at all, and on what terms.
Credit rating / SCHUFA
SCHUFA credit rating — the bank checks both, but they are not the same thing: SCHUFA and similar credit reference agencies provide banks with a structured assessment of a person’s payment history to date.
Self-disclosure
A self-disclosure is a structured, self-compiled overview of income, expenditure, assets and liabilities — the bank does not rely solely on the SCHUFA report.
Junior doctor on a fixed-term contract
A fixed-term employment contract is generally regarded as a credit risk in most professions — however, in the case of junior doctors, many banks take a much more lenient view due to the ongoing shortage of doctors, as a contract extension or subsequent post is considered highly likely.
General practitioner – proof of income
Practising doctors are classified as self-employed for tax purposes — banks therefore assess their income differently from that of employees: not on the basis of payslips, but on the basis of tax assessment notices (Steuerbescheid), business performance analyses and profit and loss accounts.
Creditworthiness check (Sections 505a and 505d of the German Civil Code (BGB))
A credit check is mandatory for mortgages.
Tax
Limited vs. unlimited tax liability
Anyone who has neither their domicile nor their habitual residence in Germany is, as a rule, subject to limited tax liability there — this applies exclusively to certain types of domestic income, such as rental income from German property.
Rental income following relocation abroad
Rental income from abroad — that is, rental income from Germany when you are resident abroad.
Double Taxation Agreements (DTAs)
A double taxation agreement between Germany and the relevant country of residence sets out which country is entitled to tax which types of income — the aim is to prevent the same income from being taxed twice in full.
Basic allowance (Grundfreibetrag) for persons with limited tax liability
As a general rule, taxpayers with limited tax liability are not entitled to the basic allowance under Section 50 of the Income Tax Act (EStG) — an often-overlooked practical point which means that domestic rental income tends to be subject to tax from the very first euro.
183-day rule
The 183-day rule is a threshold commonly found in many double taxation agreements for determining tax residency in relation to employment income; for German tax liability, however, it is one’s domicile and habitual residence that are taken into account.
tax non-resident
Tax non-residents are persons who are domiciled or habitually resident abroad and who are subject to limited tax liability in Germany (Section 1(4) of the Income Tax Act (EStG)).
Residence abroad
Russian-language service
Perini Finance & Property also provides support for property financing in Russian — a service that enables you to make financing decisions in your own native language.
Financing for those resident abroad
'It’s not possible' is usually the wrong answer when it comes to securing finance whilst living abroad — the correct answer is: it is possible, but subject to stricter conditions and not to the same extent at every bank, which makes choosing the right bank a crucial factor for success.
Income in foreign currency
Income in foreign currencies is income that, under the terms of the contract, is not paid out in euros — Swiss francs, US dollars, pounds sterling and other non-euro currencies.
Equity / LTV for those residing abroad
In the case of borrowers resident abroad, many individual lenders impose internal caps on the loan-to-value ratio and consequently require a higher level of equity; the market range is 60–100 %.
Interest when resident abroad
For banks, processing loans for borrowers resident abroad is more labour-intensive and carries greater risk — this may result in slightly higher interest rates or stricter terms and conditions.
German settlement account
Many banks expect interest and repayments to be debited from a German or SEPA-compatible account — for borrowers resident abroad, such an account may therefore be one of the formal requirements, rather than merely a practical recommendation.
Proof of identity / Signature from abroad
Banks must identify every borrower in a legally compliant manner — for customers abroad, this is done, depending on the institution, via video identification, through local consulates and notaries, or at an appointment in Germany, without travel being strictly necessary for every step.
Which banks provide financing for overseas residences?
Not every bank provides loans to borrowers living abroad, says Olga Nikushkina — which properties are eligible depends on the specific country of residence, the currency in which the income is earned and the property itself.
Return scheme: buy now, move in later
Many Germans living abroad now wish to buy a property in Germany, rent it out initially and then move in themselves at a later date — a model that is, in principle, financially viable, provided that the timeframe and subsequent owner-occupation are factored in from the outset.
Financing
Mortgage lending value
The mortgage lending value is the value that the bank assigns to a property on a permanent basis and with deliberate caution — it is almost always lower than the actual purchase price and is the actual benchmark on which the financing terms are based, not the market price.
Loan-to-value ratio (LTV)
The loan-to-value ratio (LTV) describes the ratio of the loan amount to the mortgage lending value of the property — the lower the LTV, the lower the risk for the bank and, in most cases, the more favourable the terms on offer.
Calculating the effective interest rate: nominal vs. effective interest rate
The nominal interest rate is simply the interest on the loan amount, whilst the effective interest rate also includes certain additional financing costs — comparing offers solely on the nominal interest rate is not a fair comparison.
Fixed interest rate
The fixed-rate period is the length of time for which the agreed borrowing rate remains fixed — over many years, it determines both the predictability of your financial planning and the point at which the interest rate risk becomes a reality.
Forward loans
A forward loan locks in the interest rate today for a follow-up financing mortgage that will not commence until the future — in return for a premium that increases with the lead time, but which provides planning certainty against an expected rise in interest rates.
Follow-up financing
Follow-up financing covers the outstanding balance remaining once the fixed-interest period has ended — either with the existing bank (renewal) or by switching to another bank (refinancing).
Full repayment loan (Volltilgerdarlehen)
A pay-off loan is repaid in full by the end of the fixed-rate period — there is no outstanding balance and no need for follow-up financing, but the monthly repayments are higher than with a traditional annuity loan, which leaves an outstanding balance at the end of the fixed-rate period.
Extraordinary repayment
An unscheduled repayment is an additional, one-off repayment made on top of the regular instalment — many contracts allow a certain amount to be repaid each year without incurring a prepayment penalty.
Commitment interest (Bereitstellungszins)
Commitment interest is charged when a loan that has been approved has not yet been drawn down in full — typically in the case of new-build or renovation projects, where disbursement takes place in stages as construction progresses.
Early repayment & the speculation period on sale
Two terms that tend to put many buyers off outright — prepayment penalty and the speculation period — stand up to objective scrutiny, as both can be planned for and calculated in advance.
Mortgages for doctors – special status
Doctors are regarded by banks as a preferred customer group due to their low risk of default and stable income prospects — specialist institutions such as apoBank are not automatically the cheapest option when compared with the rest of the market.
Practice loan vs. private mortgage
Practice financing (premises, equipment, health insurance scheme affiliation) and private property financing are, in principle, separate matters — mixing them up, rather than arranging them through the appropriate banks, often results in less favourable terms on both counts.
How much can I afford to spend on a house?
Affordable financing is based on a realistic budget, not on the maximum loan amount that a bank would theoretically approve.
Initial repayment rate
The initial repayment rate determines what proportion of the loan amount is repaid in the first year — it plays a key role in determining the total duration of the loan and the amount of interest accrued.
Annuity loan
The annuity mortgage is the standard form of German mortgage financing — the monthly repayment (Monatsrate) remains constant throughout the fixed-interest period, whilst the ratio of interest to capital repayment shifts continuously behind the scenes.
Home Ownership for Families 300 (KfW subsidy)
The government supports owner-occupied housing through several KfW programmes — foremost among them ‘Home Ownership for Families’ (KfW 300), which specifically supports families with children and on middle incomes in building new, climate-friendly homes or buying their first home.
Building society savings agreement
A building society savings agreement combines a savings phase with the right to a loan at a later date at an interest rate fixed at the time the agreement is signed — its primary purpose is to lock in an interest rate for the future, rather than serving as an attractive investment in the strict sense of the word.
Property development financing
Property development financing covers the development and construction of property by a property developer — from the purchase of the land through the construction phase to the sale of the completed units — and is typically provided as a senior secured loan by banks or specialist debt funds.
Income in foreign currencies and choice of bank
The definition of foreign-currency income can be found under ‘Foreign-currency income’.
Right of conversion (Wandlungsrecht) in respect of foreign-currency loans (Fremdwährungsdarlehen) (Section 503 of the German Civil Code (BGB))
Section 503 of the German Civil Code (BGB) grants consumers the right, under certain conditions, to request that a property loan denominated in a foreign currency be converted into the national currency.
Project financing
In project financing, it is primarily the viability of the project itself that determines whether a loan is granted — costs, asset values, and pre-sale and pre-let rates — rather than solely the developer’s creditworthiness, as is the case with traditional corporate financing.
Senior loan
The senior loan is the senior-secured, usually largest and most cost-effective component of a property finance package — in the event of a loss, it is repaid before all subordinated finance components.
Whole Loan
A whole loan combines senior and subordinated financing components into a single loan from a single source — meaning the borrower deals with just one contractual partner rather than several lenders.
Bridge / interim financing
Bridge financing bridges a gap until final financing is secured or the proceeds from the sale of another property are received — it is short-term, usually more expensive than standard financing, but specifically designed to follow a clear, verifiable repayment plan.
Mezzanine capital
Mezzanine capital is a subordinated form of financing that sits between senior loans and true equity — it bridges the equity gap in larger projects and is sometimes recognised by banks as economic equity.
Subordinated loan
In the event of insolvency or liquidation, a subordinated loan is repaid only after all senior creditors have been paid — this represents a higher risk for the lender, which is usually reflected in a correspondingly higher interest rate; legally, it is classified as an investment.
Loan-to-Cost (LTC)
The loan-to-cost ratio (LTC) compares the borrowed capital to the total costs of a project — unlike the loan-to-value ratio (LTV), which relates to the value of the finished property, the LTC measures the ratio against the actual construction or acquisition costs (Erwerbskosten).
Purchase financing
Purchase financing covers the acquisition of a property or a plot of land — often under considerable time pressure, with a plot of land without existing planning permission being regarded as significantly riskier.
Existing portfolio financing
Existing property financing relates to the financing or refinancing of existing, let properties — the key factors here are, above all, the rental income and the current property value.
Real-life cases (89)
Anonymised case studies supplement the wiki articles with real-life funding cases — historically accurate and not altered retrospectively.
Mortgage Wiki: An overview of the key terms: This wiki explores the most important topics relating to financing and international aspects in depth, and is divided into the following sections: procedures and processes, creditworthiness and equity, as well as tax, plus common concerns. It covers terms such as follow-up financing, building society savings plans and purchase financing. You’ll find brief definitions in the glossary; the wiki goes into greater depth.
Financing a listed flat as an investment
A listed flat as an investment: a case study – purchase price of 524,000 euros, approximately 90 % financed, purchase costs covered by own funds.
Funding your first investment — Getting started
Financing your first investment: why owner-occupier logic doesn’t work when you’re starting out, what the gross return doesn’t include – finance first.
Financing a rental property: your first flat
Financing a let property: a case study – a first flat for €348,000 with €100,000 in equity — approval granted after a brief assessment.
Building a property portfolio together
Investing in property as a pair: Two brothers have secured 95 % financing for their fourth let flat — the bank assessed the entire portfolio.
First investment: 95 % financed
First investment in my late twenties: purchase price of 274,000 euros, around 95 % financed, ancillary costs covered from my own funds, whilst my savings remained intact.
Financing a new-build property as an investment
New-build property as an investment: purchase price of 452,000 euros, approximately 90 % financed, payment made as construction progresses, then let immediately. Real-life example.
Investment: Purchase price fully financed
Property as an investment with no equity: purchase price of 289,000 euros 100 % financed – secure income, purchase costs covered by own funds. Case study.
Financing investments as a self-employed person
Property financing for the self-employed: a purchase price of 436,000 euros, 90 % financed – well-organised documentation provided the bank with a comprehensive overview.
A tax non-resident purchases an investment in Germany
Financing a rental property from the USA: purchase price of 412,000 euros, 80 % financed by a bank with experience in dealing with tax non-residents. Real-life case study.
Investing despite owning your own home: 90 % financed
Investing despite owning a home: an anonymised real-life case — a let flat, even though the owner’s home had only just been financed, with around 90 % of the purchase price financed.
Case study: Investment with a high loan-to-value ratio
95 % financing for a capital investment: Two banks offered only 70 % and 80 % respectively, whilst a suitable lender agreed to the terms after just a few days. Anonymised case study.
New-build properties and listed buildings as investment assets: tax benefits
Property as an investment with tax benefits for new-builds and listed buildings: what banks look for and why they usually do not factor in these benefits.
Property portfolio & various investments
Building a property portfolio: how banks calculate returns from the second property onwards, and which four potential obstacles can be anticipated. Three anonymised case studies.
Investments: Self-employed individuals and tax non-residents
Mortgages for the self-employed and non-residents for investment purposes: The key lies in the preparation of the application and the choice of bank, not in the interest rate.
High loan-to-value investment loan
High loan-to-value investment property loans: 100 % of the purchase price only for borrowers with a very good credit rating and a sustainable repayment plan — rules, risks, case studies.
Property financing for rental purposes: two flats
Property financing for rental purposes: An employee is financing two let flats at the same time — around 90 % of the purchase price.
Anaesthetist: On-call duties as a source of income
Anonymised case study: an anaesthetist finances his first investment — on-call duties made all the difference.
Junior doctor, aged 31: first rented flat
Anonymised case study: a junior doctor (31) is financing his first rented flat — why the first bank turned him down.
Chief Physician: Purchase price financed, portfolio left untouched
Anonymised case study: a senior consultant finances the purchase price of 498,000 euros for his first investment and leaves the investment portfolio untouched. Section 34i.
Specialised medical income: what banks recognise
On-call duties, involvement in medical centres, changing hospitals: why standard assessments fail to capture doctors’ incomes – and how to succeed.
Investment flats for doctors: Getting started
The first investment for doctors — from junior doctors to senior consultants. What banks look for. Anonymised practice reports. Section 34i.
Specialist: five residential properties in eight years
Anonymised case study: a specialist doctor builds up a portfolio of five residential properties over eight years, starting with his own home. Section 34i.
Joint practice: two doctors, two flats
Anonymised case study: two doctors at a group practice finance two investments — with a deliberately high loan-to-value ratio. Brokered under Section 34i GewO.
Financing an investment before changing hospitals
Anonymised case study: a heart surgeon deliberately makes a further investment before moving to a university hospital. Brokered under Section 34i GewO.
Cardiologist: Purchase prior to setting up her own practice
Anonymised case study: a cardiologist finances her first investment despite plans to set up her own practice. Section 34i.
Paediatrician: the move to a home of one’s own
Anonymised case study: a paediatrician builds up a property portfolio after buying her own home — how her first investment paid off. Section 34i.
New-build or heritage flats for doctors
New-build or heritage flats as an investment for doctors — without tying up the practice’s liquidity. Anonymised practice reports. Section 34i.
Senior Consultant: New-build flat 90 % financed
Anonymised case study: a new-build flat costing 486,000 euros, around 90 % financed — the savings remained untouched. Section 34i.
Multiple properties as a doctor: surgery and flats
Building a property portfolio for doctors: from buying a home to investing in group practices or acquiring several properties in succession — four case studies. Section 34i.
Radiologist with a stake in a medical centre: financed by capital investment
Anonymised case study: a radiologist finances his first investment — using income from his employment and his stake in a medical centre. Brokered under Section 34i GewO.
Urologist: two investments in one year
Anonymised case study: a urologist makes two investments within a year — why he made a conscious decision to do so. Section 34i.
Dentist: Listed flat without the practice's liquidity
Anonymised case study: a dentist purchases a listed flat as an investment — without tying up his practice’s liquidity in the process. Brokered under Section 34i GewO.
Special income: bonuses, shares, source of funds
Mortgages for borrowers with unusual income and assets: variable income, employee shares, source of funds, fixed-term contract — six case studies.
Brexit: A job in London, a home in Germany
Anonymised case study: Brexit and a job in London — the dream of owning a home was almost over, but in the end the home in Germany was financed. Section 34i.
Tax-free income from Dubai: a purchase in Munich
Anonymised case study: Tax-free income from Dubai, substantial savings, two rejections — then Munich came through with 760,000 euros. Section 34i.
Income from Luxembourg: Home ownership in Germany
Anonymised case study: Why even bank employees can struggle to secure their own financing — buying a home with income from Luxembourg. Section 34i.
Income from Switzerland: a home near Freiburg
Anonymised case study: loan for a Swiss cross-border commuter — a detached house near Freiburg despite income from Switzerland, following rejection by the second bank. Brokered under Section 34i GewO.
Living in Austria: Buying a house on Lake Chiemsee
Anonymised case study: A detached house on Lake Chiemsee with residence in Austria — why residence was more important than income. Brokered under Section 34i GewO.
A family from South Africa: a mortgage after moving house
Anonymised case study: Mortgage financing despite no SCHUFA history — why the lack of information was not the problem. Brokered under Section 34i GewO.
Pilot with a variable income: flat in Munich
Anonymised case study: a pilot living in Alsace is financing a flat in Munich, even though his income fluctuates. Section 34i.
Cross-border commuters and neighbouring countries: real-life examples
Mortgages for cross-border commuters and people from neighbouring countries (Switzerland, Austria, Luxembourg, the Netherlands, Italy). Case studies. Section 34i.
Heart surgeon from Brazil: Home financed
Anonymised case study: A heart surgeon from Brazil with a permanent hospital contract — why his main bank refused the loan and another bank provided the funding. Section 34i.
Engineer from Japan: fixed-term contract, five years
Anonymised case study: An engineer from Japan — why a fixed-term employment contract almost put an end to his dream of owning a home, and yet he managed to buy a house after all. Section 34i.
Managers in Singapore: Employee shares as equity
Anonymised case study: a manager moves from Singapore to Frankfurt — why the first bank did not recognise his share-based remuneration. Brokered under Section 34i GewO.
Returning to Germany: Financing after years abroad
Mortgages when returning to Germany or starting afresh without a SCHUFA credit history: how to get started anyway. Case studies. Section 34i.
Swiss dentist: two flats in Freiburg
Anonymised case study: Swiss dentist invests in Germany — two flats in Freiburg for 742,000 euros, 515,000 euros financed. Section 34i.
Skilled worker from India: terraced house near Frankfurt
Anonymised case study: Terraced house near Frankfurt for 648,000 euros, 530,000 euros financed — the mortgage repayments are covered by the basic salary. Brokered under Section 34i GewO.
Entrepreneur from Israel: House in Munich following exit
Anonymised case study: Loan from abroad for an entrepreneur following a start-up exit — a detached house in Munich. Section 34i.
Italian balance sheets at German banks
Anonymised case study: An entrepreneur from northern Italy — why German banks interpret Italian financial statements differently and how it was achieved. Section 34i.
Entrepreneur from the Netherlands: flat in Düsseldorf
Anonymised case study: Entrepreneur from the Netherlands — flat let in Düsseldorf for 498,000 euros, 370,000 euros financed. Brokered under Section 34i GewO.
US investor: Proof of the source of funds (Mittelherkunftsnachweis) in Germany
Anonymised case study: US investor — it was not the money itself, but the source of the money that proved to be an obstacle. Proof of the source of funds when purchasing property. Section 34i.
Resident in Dubai: Property in Germany financed
Anonymised case study: An international career in Dubai and property in Germany — no contradiction. Property in Germany, income from the UAE. Brokered under Section 34i GewO.
Residence abroad: why banks turn applications down
Financing a property in Germany whilst living abroad (Spain, Dubai, USA): why banks turn applications down and how to succeed. Case studies. Section 34i.
Residence in Spain: flat let out in Düsseldorf
Anonymised case study: Resident in Spain, flat let in Düsseldorf for 425,000 euros, 357,000 euros financed. Brokered under Section 34i GewO.
Residence in the USA: Multi-family house in Leipzig
Anonymised case study: Why a six-figure US income alone is not enough — and how it was achieved nonetheless. Brokered under Section 34i GewO.
Using follow-up financing for modernisation
Anonymised case study: Follow-up financing with modernisation — taking advantage of the low remaining debt to future-proof the home. Section 34i.
Seizing the right moment with a clear outlook
Anonymised case study: What the bank checks when buying a house whilst planning a change of job — seizing the right moment with a secure outlook. Section 34i.
Building an architect-designed house on your own plot of land
Anonymised case study: Architect-designed house on the owner’s own plot — the value of the plot serves as a substitute for equity (Eigenkapitalersatz) for the planning application. Section 34i.
Converting a bungalow to make it suitable for older people and financing the work
Anonymised case study: Property as a form of retirement provision — accessibility-friendly conversion of a bungalow with comprehensive financing. Section 34i.
Buying a house before selling: bridging finance
Anonymised case study: Bridging finance for a house purchase prior to the sale of the existing flat — achieving your dream home without the pressure to sell. Brokered under Section 34i GewO.
Including the cost of a solar panel system in the mortgage when buying a house
Anonymised case study: A photovoltaic system with battery storage is included in the financing when purchasing a house, rather than being retrofitted years later. Section 34i.
Include the heat pump in the mortgage calculations
Anonymised case study: a married couple replace their oil-fired heating system with a heat pump and finance the conversion as part of their house purchase. Section 34i.
Co-finance a heat pump and photovoltaic system
Integrating a heat pump or photovoltaic system directly into your mortgage: finance modern home technology from the outset. Case studies. Section 34i.
Your first home: purchase and renovation covered by a single mortgage
Anonymised case study: a young couple buy an existing house rather than a new-build and finance the renovation as part of the same mortgage. Brokered under Section 34i GewO.
What does the bank require for 100 % financing of the purchase price?
Anonymised case study: a young married couple finance the purchase price in full; their own funds cover the incidental costs of the purchase. Section 34i.
Terraced house for a family with two children
Anonymised case study: A family with two children buys a terraced house and finances the modernisation and heating system upgrade at the same time. Section 34i.
Financing a prefabricated house: predictable construction costs
Anonymised case study: Prefabricated house on the client’s own plot — foundation slab, ancillary construction costs and outdoor facilities financed by a single provider. Section 34i.
Modernising and financing an inherited family home
Anonymised case study: a married couple inherit their parents’ debt-free home, keep it and finance the complete modernisation themselves. Section 34i.
Buy a house built in 1955 and completely renovate it
Anonymised case study: How the purchase and 50 % refurbishment of a detached house built in 1955 were financed. Section 34i.
Buy a house built in 1965 and carry out a complete refurbishment
Anonymised case study: A married couple buy a house built in 1965 and finance a complete refurbishment of the roof, windows, heating system and electrical installations. Section 34i.
Energy-efficiency upgrades for a house built in 1975
Anonymised case study: A family buys a house built in 1975 and finances a heat pump, windows and roof insulation at the time of purchase. Section 34i.
Financing a house with a granny flat
Anonymised case study: House with a let granny flat; purchase price fully financed on the basis of a very good credit rating; ancillary costs covered by own funds. Section 34i.
Financing the transfer of ownership and payment in a fair manner
Anonymised case study: Taking sole ownership of a property — a co-ownership share is paid out following the divorce, and the modernisation is co-financed. Section 34i.
Buying a house with a view to converting the loft at a later date
Anonymised case study: a family buys a house and, from the outset, includes in their financing the conversion of the loft – which is not planned until years later. Section 34i.
Financing the construction of a house on a plot of land received as a gift
Anonymised case study: Building a house on a gifted plot of land — how existing family assets, used as equity, made it easier to buy a home. Section 34i.
Financing a house purchase with 10 % set aside for renovation
Anonymised case study: a young couple are financing the purchase price and the renovation of the kitchen, bathroom and floors; their own funds cover the ancillary costs. Section 34i.
Financing a house purchase with 20 % spent on modernisation
Anonymised case study: Buying a house and modernising it — a 20 % renovation package is financed directly, rather than simply looking for modernised properties. Section 34i.
Financing a house purchase with 30 % spent on renovation
Anonymised case study: Buying a house requiring 30 % refurbishment — an existing property in need of refurbishment was transformed into a modern home. Section 34i.
Buy a farmhouse and renovate 50 % of it
Anonymised case study: a married couple with three children buy an old farmhouse and finance its complete renovation at the same time. Section 34i.
Mortgage financing during parental leave
Anonymised case study: Mortgage financing whilst on parental leave — why the timing does not depend on your bank balance: Buying a house whilst on parental leave. Section 34i.
Young couple buy an existing house
Anonymised case study: following their wedding, a young couple opt for an existing property rather than a new-build and finance the renovation at the same time. Brokered under Section 34i GewO.
Financing the purchase and modernisation of a house
Purchase price and modernisation in one mortgage: from 10 % modernisation to complete modernisation. Anonymised case studies. Section 34i.
Financing a KFN new build and making use of funding
Anonymised case study: KfW funding for new-build projects (KFN) — energy-efficient construction and making sensible use of funding opportunities, with suitable financing. Section 34i.
Mortgages in special circumstances
Home ownership in specific life circumstances: parental leave, divorce, a change of job, multi-generational living or bridging finance. Case studies. Section 34i.
Financing a multi-generational home
Anonymised case study: three generations under one roof — a house with a granny flat, the conversion and modernisation financed together. Section 34i.
Financing new builds, prefabricated homes and construction projects
New-build, prefabricated house, KFN or QNG grant, building on your own plot: what matters when it comes to construction financing. Case studies. Section 34i.
Financing a new-build property with QNG certification
Anonymised case study: New-build property with QNG certification on the owner’s own plot — the house, ancillary building costs and outdoor facilities fully financed. Section 34i.
What is the minimum amount of equity the bank requires?
High loan-to-value ratio: when a bank lends up to the full purchase price — secure income, manageable repayments, ancillary costs covered by own funds. Section 34i.
31 viewings, then the financing was sorted
Anonymised case study: a two-year search, purchase price of €642,000, purchase price and modernisation financed, ancillary costs covered by own funds. Section 34i.
Frequently asked questions
Financing a new build: When are commitment charges payable?
They relate to portions of a loan that have been committed but not yet drawn down. This is typically the case with new-build projects where funds are disbursed in stages.
What is commitment interest?
Commitment interest is interest charged on portions of a loan that have not yet been drawn down. It typically arises in the case of new-build projects where funds are disbursed in stages.
What do non-residents need to bear in mind when taking out a mortgage in Germany (limited tax liability, withholding tax (Quellensteuer))?
Anyone who has neither their domicile nor their habitual residence in Germany is considered a tax non-resident and, in the case of rental income from a German property, is subject to limited tax liability under Section 49 of the German Income Tax Act (EStG): only this domestic source of income is taken into account, not their worldwide income. There is no standard withholding tax (automatic deduction at source, as with investment income) on rental income — taxation is handled via a standard German tax return (assessment). Income-related expenses such as interest, depreciation and maintenance remain deductible, though without the basic allowance, which is only available to persons with unlimited tax liability.
When it comes to the financing itself, the choice of bank is also a factor: residing abroad means a loan-to-value ratio of 60–100 %, depending on the type of income and credit rating, and a more limited choice of banks than for German residents — the country of residence determines the range of banks available, not the loan-to-value ratio. Full details on tax liability: Limited vs. unlimited tax liability in detail.
For whom is 100 % financing of the purchase price a sensible strategy?
For investors, doctors and buyers with excellent credit ratings who wish to invest their equity wisely — not as a substitute for a lack of equity. Prerequisites include a stable income, a good SCHUFA credit rating, a marketable property and a minimum loan amount (Mindestdarlehen), typically from €250,000. With an investment, 100 % financing is easier to justify than with a home purchase; no bank will finance the ancillary costs. Full financing in detail.
What is the loan-to-value ratio and how does it affect my interest rate?
The loan-to-value ratio (LTV) describes the ratio of the loan amount to the mortgage lending value of the property — the lower the LTV, the lower the risk for the bank and, in most cases, the more favourable the terms offered. Loan-to-Value (LTV) in detail.
What is pre-completion interest, and how can I avoid paying it when building a new home?
Commitment interest is charged when a loan that has been approved has not yet been drawn down in full — this is typically the case with new-build or renovation projects, where the funds are paid out in stages as construction progresses, rather than in a single lump sum as is the case when purchasing an existing property. Commitment interest in detail.
How much should I agree to pay in additional repayments, and what are the benefits of making higher repayments?
An unscheduled repayment is an additional, one-off repayment made on top of the regular instalment — many contracts allow for a certain amount to be repaid each year without incurring any penalties, a right which can result in significant interest savings over the term of the loan. How much makes sense in each individual case depends on your cash flow and the terms of your contract. Extra repayments in detail.
Any questions on this topic?
A first consultation is free and without obligation — the commission is, as a rule, paid by the bank. We tell you what this means for your own financing.
Related pages
Glossary
Terms relating to mortgage finance, KfW, equity, creditworthiness and financing for those living abroad — explained in simple terms.
Where does the time go before you get a positive response?
How long a mortgage takes: all the steps from application to disbursement — with realistic timeframes for each stage.
Which bank offers financing for a medical practice and a home?
Loans for doctors: medical practices, homes, investments — banks with dedicated programmes for doctors, Section 34i of the Trade Regulation Act (GewO), a comparison of over 650 banks.
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.
