German Mortgage

How to Get a Mortgage without Equity in Germany?

Since banks used to demand at least 20% to 30% of equity (down payment) to finance home ownership, mortgage lending without equity, also known as full financing, was impossible for everyone. However, getting a mortgage without equity in Germany is possible now, thanks to the increase of number and types of providers in recent years.

This article highlights the special requirements and factors you should take into consideration before securing full financing. It is also critical to talk to a mortgage advisor to evaluate all available mortgage options, as this will help you choose the best credit provider.

Target group

Young families with high income are usually the ideal target group for lenders. They often do not have adequate long-term home savings but they urgently need housing. This is also attractive for prospective homeowners who want to reserve their savings instead of tying it into real estate assets.

Financing levels of more than 100% (i.e. 105% – 108%) are available on the market for individuals with permanent residency to cover additional costs such as construction costs, land transfer tax, notary and brokerage fees.

Meanwhile, 100% is only available to individuals with a limited residence permit. And foreign investors and individuals who do not live and work in Germany are not qualified for full financing. Therefore, they have to cover the rest of the costs with down payment.

Read also: How Much Can I Borrow?

Special requirements for getting a mortgage without equity

Credit score (Schufa)

The lenders calculate a credit score (Schufa) through collecting information from various public sources such as association, commercial registers, public debt directories of the local courts etc. It indicates the chance with which the loan is reliably repaid. Hence, the higher the score, the better the creditworthiness of the debtor.

Read also: How to Get a Mortgage in Germany?

Job security and financial stability

As mentioned above, high-income earners are more likely to receive full financing. It is usually limited to seven to nine times the annual net income. Meanwhile, the handling of self-employed and freelancers is stricter. Therefore, borrowers should ensure they have enough savings to repay their monthly instalments without getting into financial trouble.

Location and condition of the financed property

This is also important for the credit decision, since the object serves as security for repayment of the loan.

Factors buyers should take into account when getting a mortgage without equity

Relatively high interest rates

Given that the potential for credit risk is greater, such loans usually have a higher interest rate of 0.2% to 0.4% than equity backed real estate financing. Financing of more than 100% also adds another noticeable premium. Overall, the interest premiums of the loan are still significant in terms of amount in the long run.

Higher interests and repayment instalments

A bank usually demands higher repayments for mortgage without equity than for normal construction loans. The usual initial repayment of 1% can make up 2% or 3%. The client therefore should prepare to pay significantly higher monthly charges. They should also put longer interesting fixing periods into consideration.

Read also: Refinance Mortgage in Germany: The Basics

Additional costs

When considering mortgage lending, you should also take additional costs into account. For instance, buyers should purchase residual debt insurance to cover unemployment, illness or death appropriate.

Moreover, mortgage lending is only worthwhile if you plan to keep the financed property in the medium to long run. If you plan to sell the property again soon, this may not pay off, as this would incur additional costs.


Nevertheless, when choosing a credit provider, you should pay attention not only to the annual percentage rate, but also to other terms of the contract, such as whether and under what conditions special repayments are possible. Therefore, it is important to discuss available options with a mortgage advisor before making your decision.

We are happy to answer any questions. Via email at or by phone 0800 05 28000. You can also start with the LoanLink mortgage illustrator here:

Got a question about the real estate valuation or the home purchase process in Germany? Contact us!

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