How to get a house loan in germany ?

To get a house loan in Germany, you generally need a solid income (proof via payslips / tax returns), good SCHUFA credit score, a German bank account, residency, and typically 20% equity for the deposit, plus funds for ~10% in extra fees (tax, notary).

To get a house loan in Germany, you generally need a solid income (proof via payslips/tax returns), good SCHUFA credit score, a German bank account, residency, and typically 20% equity for the deposit, plus funds for ~10% in extra fees (tax, notary).

Foreigners can get loans, but terms might vary, and you’ll need documents like passports, income proof, and sometimes a translator for contracts.

Loan Requirements & Steps

Residency & Status: Must live in Germany; stable work/residence permits (especially long-term) are crucial for favorable terms.
Income: Stable, verifiable income (3-6 months payslips or 2 years tax returns/accounts for self-employed).
SCHUFA Score: A good credit score is essential.
Equity: Banks often prefer 20% down payment plus cash for ancillary costs (property tax, notary, agent fees, ~10-12% total).
Bank Account: Must have a German bank account.

Step-by-Step Process:

Budget & Affordability: Calculate your maximum loan and monthly payment, including all costs.
Find a Lender: Check your current bank, but also compare offers from other German banks or use a broker (like Hypofriend, MLP).
Gather Documents: Prepare personal ID, proof of income, bank statements, and property details.
Apply: Submit application, including a self-disclosure form detailing finances.
Credit Check: Bank runs a detailed SCHUFA check.
Review Loan Offer: Carefully examine the effective interest rate, repayment terms, and fixed-rate period.
Notarization: Sign the final contract at a notary, especially for the land charge (Grundschuld).

Tips for Expats:

Long-Term Focus: Building toward permanent residency improves loan chances.
Consider Brokers: They can compare many offers and handle complex paperwork.
KfW Loans: Check for state-backed loans for efficiency or first-time buyers.
Understand Costs: Factor in significant extra purchase costs beyond the property price.

Financial Eligibility & Affordability

Income Limit: Monthly mortgage repayments should generally not exceed 35% of your net monthly income.
Loan Multiplier: As a rough estimate, most banks will lend up to 100 times your monthly net income.
Equity (Capital):
- Full Residents/EU Citizens: Often qualify for 100% financing (0% down payment), though they must pay ancillary costs (notary, tax, agent) in cash.
- Non-EU/Non-Permanent Residents: Typically require a 20% to 40% down payment to secure approval.
Creditworthiness: A positive SCHUFA score is mandatory. If you are a new arrival without German credit history, some lenders accept credit reports from your home country.

Available Loan Types

Annuity Mortgage (Annuitätendarlehen): The most common type. Monthly payments remain constant, but the portion going toward principal increases over time.
Fixed-Rate Period: Rates are typically fixed for 10 to 15 years. After this period, you must refinance (Umschuldung) at current market rates.
Bausparvertrag (Building Society Loan): A unique hybrid of a savings plan and a guaranteed low-interest loan for future use.

Government Subsidies (KfW Programs)

In 2026, you can significantly lower your borrowing costs by utilizing KfW Bank programs:

KfW 124 (Home Ownership): Up to €100,000 for first-time buyers of owner-occupied property.
KfW 300 (Families): Extremely low interest rates (as low as 0.01%) for families with children and household incomes under €90,000 (+€10,000 per additional child).
KfW 261/297 (Energy Efficiency): Loans up to €150,000 with repayment grants (up to €37,500) for climate-friendly new builds or renovations.

Application Checklist

Ensure you have these documents (translated and notarized if necessary):

Personal: Valid passport, residency permit (Blue Card or Permanent Residence), and registration certificate (Meldebescheinigung).
Income: Last 3–6 months of pay slips or last 2 years of tax assessments for the self-employed.
Property: Recent extract from the Land Register (Grundbuchauszug), floor plans, and a certified property appraisal.