German Mortgage: What non-residents and foreign investors should know

 German Mortgage: What non-residents and foreign investors should know


Taking out a mortgage represents one of life’s greatest opportunities: the benefit of investing in a property or buying a home. Investing in a buy-to-let property or your own home in Germany is a good decision for many reasons. For one, Germany is one of Europe’s safe havens for capital and stability is a hallmark of the country’s real estate market. However, a mortgage also represents one of the most significant debts that most people will ever take on. Here, you will find all the essential advice that non-residents and foreign investors need to know when taking out a German mortgage. 


You’ll also find an example of an annuity mortgage calculation of a non-German resident who financed his property with a home loan. If you’re a foreigner looking for a German mortgage, the following article will help you understand the process. We will review the characteristics of German mortgage markets and outline the mortgage products offered. Overall, an essential read to ensure a smooth process.


How do mortgages work in Germany?

As a non-resident or foreign investor, there might be a difference between German mortgages and those in your country of residence. Here are a few details to keep in mind:


You’re expected to put down a deposit of 30-40% as an expat. Your bank might also ask you for evidence of regular savings.

Your German mortgage might last between 25 and 30 years, with fixed interest rates for ten years or longer. 

Compared to many countries, there are few banks that provide higher-risk mortgages in Germany.

Part of your mortgage interest may be tax-deductible when purchasing a buy to let property.

As the competition for properties in Germany increases, non-residents and foreign investors must be well-prepared. Here are a few things to consider:


Gain a competitive advantage

Getting expert advice on a mortgage in Germany, considering the mortgage structure, repayment schedule, and information on how to get preapproved for a mortgage loan is critical. Being well-prepared will help you act quickly once you decide to buy a property in Germany. This competitive advantage can help you “beat out” other applicants interested in the same property. Proper preparation also includes all the documents needed for a mortgage in Germany. In our article, you will find all the information you need in order to be well-prepared for the first bank appointment for a mortgage in Germany.

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