Buy-to-let German Mortgage

Buying a house in Germany: Everything Foreigners need to know

Unlike other countries in the European Union, Germany doesn’t place restrictions on foreign investment in German properties. That means an incredible opportunity to buying a house in Germany (whether to live or buy-to-let) regardless of being a resident or non resident.

Even after 2020’s pandemic, the property market in Germany continues to boom, with apartment prices rising an impressive 9.59% during Q1 2021. According to the Global Property Guide, German house prices have risen almost 67% from the beginning of 2014, making it a substantial investment opportunity (not to mention a great country to live in!).

The demand remains strong, boosted by low interest rates despite Germany’s low homeownership levels (a little over 50%). And if buying a dream house in Germany has been a plan of yours for a while, here’s what interested expats need to know:

  • Where you should start looking for your dream house in Germany
  • How much money do you need to save/can afford on your monthly loan payments
  • What steps do you have to take to buy German property
  • And what property taxes you will be subject to

Keep reading to find out the necessary details to buy a house in Germany.

How to buy a House in Germany?

Buying a house in Germany is a challenge even for natives. There are bureaucratic hurdles to overcome and sometimes it takes a lot of time. This guide should give you an overview of what to do.

First, make sure you have a few basics sorted out:

  • Use a mortgage calculator to find out how much you can afford
  • Check if you’re eligible for government funding (such as the KfW)
  • Open a German bank account (or get help here to open one)
  • At the lower part of the guide, we have listed useful tips for finding a house

Once you find a property you like, negotiate the purchase price, and place a reservation. After we know where to find a house in Germany, we need to look at the costs.

Money: How much do you need to save to buy a house in Germany?

Down payments for property in Germany usually start at 20% (although it’s also possible to get 100% of the property price as a loan). However, most German banks consider foreign investments as higher risk, so required deposits might go up to 50%.

Your down payment influences your monthly mortgage fees and your available final purchasing value (i.e., total loan amount), so make sure you plan accordingly.

Where should you buy a house in Germany?

Perhaps you already have a favorite German city in mind, or maybe you are looking for up and coming locations for real estate investment in Germany. As the German property market heats up, so does the square meter.

Prices in the so-called Big Six – Berlin, Hamburg, Munich, Frankfurt, Düsseldorf, and Cologne – are usually the highest:

City Existing buildings (buy)
Berlin 5,300 EUR/m²
Cologne 4,185 EUR/m²
Munich 9,300 EUR/m²
Hamburg 6,150 EUR/m²
Frankfurt 6,900 EUR/m²
Düsseldorf 5,000 EUR/m²

*According to Statista (Q1/2021).

Searching for a house in Germany can be a little tricky.

But that doesn’t mean that smaller German cities are not an incredible opportunity to invest in property as well. According to immowelt, cities like Chemnitz, Duisburg and Wuppertal top the return on investment list with over 7% profits. Interested in which cities are the most liveable? Check out our new data sheet about the most liveable cities in the world. Spoiler Alert: German cities are also included!

Where can I find a house in Germany?

There are several ways to find houses in Germany. We have listed the most popular possibilities here below. Notice: Outside this list, there is always the chance to find a house. Tell your friends and colleagues about your plans.

A house in Germany can be found on websites such as:


Outside the internet exists also good opportunities to find a home in Germany, like for example:

  • Real estate agents
  • Newspapers
  • Foreclosures

However, if you need further information, check out our detailed property listing pages. If the turnover of the area you are looking for is low, give yourself one year or more to find your ideal home. For newly built property, check neubau kompass.

Finding out how much you can afford

It’s important to calculate how much you can afford before you start looking at properties. This way, you make sure you can pay for the German house you want. Not only that, but you also increase your chances of getting your loan approved, avoiding nasty surprises down the line.

With german mortgage calculators, you can estimate your loan amount and monthly repayment throughout the home loan. You can also change the frequency of your payments to check how that will influence your mortgage repayments.

In addition to the financial side, your preparation to buy a house in Germany should include the following items below.

Important steps to secure your German property

Once you know how much you can invest in your German house, it’s time to get things in motion. These important steps will help you secure your mortgage deal and get the property of your choice:

  • Mortgage pre-approval: Requesting a mortgage pre-approval can make or break your property deal. The pre-approval certificate takes only 10 minutes, and it shows real estate agencies that you mean business! The property market can be extremely competitive in cities like Berlin or Munich, and this will help you stand out (and inspire credibility).
  • Check your financing options: Each bank has different interest rates, closing costs, monthly installments, and more… Choosing to analyze your loan options with a mortgage broker can ensure you’re making the best financial decision.
  • Submit (and prepare) your mortgage paperwork: Ideally, you have already sorted out your mortgage documents (e.g., copy of your ID, the last 3 salary slips, property exposé, etc.) in advance. This means that, after you’ve chosen the financing option, you can submit your mortgage application. Approval can take from 2-15 days.
  • Sign the contract: Congratulations! Your mortgage application was successful and you’re about to purchase a house in Germany. Amazing news, right? Schedule your notary appointment and sign the contract before your bank offer expires (which can happen from 1-4 weeks).

Don’t forget to set up a SEPA direct debit mandate, so the bank can withdraw the monthly loan repayments from your account. (If you’ve invested in a property under construction, your payment plan will be different.)

Finally, you’re now the proud owner of a German house. Well done!

What taxes are property owners subject to?

The hardest part is done. Sort of! It’s important to keep an eye on the closing costs of your property deal, too – as these can add up quickly. These include:

  • Property transfer tax/stamp duty: Varies between 3.5% to 6%, depending on the property location
  • Notary fees/land register fees: Around 1.5% of the final property price
  • Real estate agent fees:These fees vary from 4.76% to 7.14% of the property price

In total, purchase fees are between 5-15% of the property price. Bear in mind that, unless you’re already a German resident, closing costs will be covered by the buyer and will not be included in your bank loan.

If you want more details about closing costs, this article covers them in depth. And we haven’t even covered taxes yet!

Taxes: Buy-to-let and buy-to-live

If you chose to invest in a buy-to-let property, you’ll have more flexibility when it comes to taxes on your rental income and mortgage interest. The same, however, is not valid for owner-occupied property (i.e. your mortgage interest is not tax-deductible).

However, as property owner you can also deduct maintenance costs, improvements and repairs they make to their properties to a certain extent. On top of your rental income tax, there’s also a 5.5% solidarity surcharge.

Selling your property

So your investment was a success! Amazing. But before you put up that “for sale” sign, remember that deciding to sell a German property within 10 years of purchase means paying capital gain tax.

That tax, however, is gone if you own a property for longer than 10 years. If you’re looking for a long-term housing investment, then Germany might be the perfect market for you!

Buying a house in Germany: the essentials

  • Find out how much you can afford with a mortgage calculator
  • Prepare your mortgage documents in advance and get a mortgage pre-approval
  • Find your ideal property in your desired city. Visit a property, make an offer, and reserve the property if possible
  • Book your notary appointment, sign the contract and pay the closing costs
  • Use property valuation to make sure the price is fair

And in case any doubts come up, remember that mortgage brokers can help your house buying process in Germany to go as smoothly as possible.

If you are looking for an Apartment also see our Guide about Buying an Apartment in Berlin.

Ready to start looking for your German house?

In summary, with the right preparations, nothing stands in your way of buying your dream home in Germany. Have your budget in mind and prepare your documents fully and timely. This will minimize bureaucratic problems and save you time and stress. Have you already found your property? Get in touch with your German mortgage broker as soon as possible. We at LoanLink24 are here to help you realize your dream home in Germany!

A certified mortgage broker can answer all questions that expats might have – in English! – when it comes to investing in German property. If you’d like some free advice about buying a house in Germany, please reach out to LoanLink24 here.

We are happy to answer any questions. Via email at or by phone 0800 05 28000. Got a question about the real estate valuation or home purchase process for non-German residents in Germany? Contact us!

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