Mortgages also without German passport

Do you dream of owning your own home in Germany? Whether for your own use or as an investment - Dr. Klein supports you every step of the way! From the initial inquiry to moving into your property, we are there for you, regardless of your nationality and residence status. Whether you are an expat with a BlueCard, settlement permit or temporary right of residence! If required, we can advise you completely digitally.

As one of the largest mortgage brokers in Germany, we compare offers for you from a network of more than 600 banking partners. You no longer have to enquire with different banks on your own. In a fast process, you will receive the offers with the best conditions on the market. Contact us today and let's realise your project together!

How does a mortgage with Dr. Klein work?

We make it easier for you to own your own property and show you how you can obtain a mortgage from Dr. Klein in 5 steps.

Why finance with Dr. Klein?

Dr. Klein has been taking care of customer needs in the areas of mortgages, insurance and instalment loans for over 70 years. With more than 550 advisors at 240 locations, we are one of the largest financial services providers in Germany. With our contacts to more than 600 banking partners, we have a comprehensive overview of the market. Thanks to our outstanding position in the market and our long-standing partnerships with renowned finance and insurance providers, we can offer our customers above-average favourable conditions. For you, this means: With us as a mortgage broker, you receive favourable interest rates for your property loan, competent and fair advice as well as first-class service. Dr. Klein has already been repeatedly recognised for all of this.

Can I get a mortgage in Germany?

You can get a mortgage in Germany, regardless of whether you have a temporary employment contract, a Bluecard or a settlement permit. You do not need any knowledge of German or a German passport. However, expats often find it difficult to obtain a loan due to their residence status. This is because people in Germany buy a property with the intention of living in it for the rest of their lives. Buying a property for just a few years is rather unusual and is associated with risks at many banks.

Nevertheless, a mortgage for expats is possible. Dr. Klein works with over 600 banks in Germany. We have experience with customers who come from abroad and know the banks that are suitable for your financing. We are sure to find the right mortgage for you from our large pool of partners.

What documents do I need for the first appointment with Dr. Klein?

For your first consultation with Dr. Klein, only a few documents are required. You should bring the following information with you:

• Your monthly income
• The amount of equity you are contributing to the mortgage
• Self-disclosure 
• Possibly an exposé of the property

With this information, we can already offer you initial financing proposals. If you decide in favour of a financing offer, your advisor will discuss with you what further documents the bank needs from you to conclude the mortgage.

What does a typical mortgage in Germany look like?

A mortgage in Germany is usually an annuity loan with a long-term fixed interest rate of at least 10 years. But what exactly does that mean?

• Annuity loan: With an annuity loan, you pay a fixed amount back to the bank each month as an instalment, known as the annuity. This instalment is made up of a repayment portion and an interest portion. With each payment, part of the loan is repaid (the debt is repaid and reduced). The other part covers the interest on the loan. As part of the debt is repaid with each instalment, the remaining loan amount is reduced, and therefore the interest portion of the instalment is also reduced. Consequently, the repayment portion increases in each subsequent instalment, although the total instalment remains the same.
• Long fixed interest period: The fixed interest rate is the period for which the interest rate is fixed. In Germany, a fixed interest rate of 10 years or more is common to ensure planning security. This means you know exactly how big your monthly repayments will be for a long period of time.

Of course, there are also loans in Germany with flexible interest rates or a shorter fixed interest rate. Our advisors will be happy to show you what options you have when structuring your loan.

What are the current interest rates in Germany?

Currently, interest rates are around 3 %. For example, you can get a loan of 350,000 € with a 10-year fixed borrowing rate and an initial repayment of 2 % from an effective annual interest rate of 3,35 % (as of 21.11.2024, representative example).

Compared to 15 or 20 years ago, this means that mortgage interest rates are still relatively favourable. Dr. Klein's general interest rate forecast assumes a sideways movement in 2024.

FAQ- Mortgages in Germany

How much does a consultation with Dr. Klein cost?

The consultation and the processing of the mortgage through Dr. Klein are free of charge for you. Dr. Klein receives a commission for every mortgage brokered. This is paid by the bank.

How long does it take until I receive an offer?

At your first appointment with a mortgage specialist, you will receive an offer for suitable mortgages. As we have access to offers from more than 600 banking partners we can find the most mortgages for your property project right away. The prerequisite for this is that you bring all the necessary documents with you to the appointment.

How can I contact Dr. Klein?

If you would like to arrange a mortgage consultation, you can reach us via our contact form. Alternatively, you can email us at info@drklein.de or call us on +49 451 14083839. You can reach us by phone from Monday to Friday from 8 am to 6 pm.

What income do I need to buy a property?

To be able to afford a property in Germany, your income should be high enough so that you can pay the monthly loan instalment without financial strain. As a guideline, the monthly loan instalment should ideally not exceed 30% of your net income. This ensures that, in addition to the loan instalment, you can also easily cover your current living costs and unforeseen expenses. It is important that you include a buffer when planning your property financing so that you can continue to pay the instalment comfortably even if interest rates fluctuate or your income changes.

How much capital do I need for a mortgage?

We recommend financing the ancillary purchase costs, which make up around 10-15 % of the purchase price, with your own capital. You will get the best conditions if you can finance at least 30 % of the purchase price with your own money. In this case, the bank classifies the default risk as very low and therefore grants you a particularly favourable interest rate.

What is considered as equity in Germany?

In Germany, equity is the money that you can personally contribute to the purchase of a property without having to take out a loan. Equity includes, among other things:

• Cash: The money available in your bank accounts.
• Savings: Including time deposits and call money.
• Securities: Shares, bonds, or funds that can be converted into cash.
• Building society savings: Balances from a building society savings contract that can be used to purchase property.
• Personal contributions: Also known as a muscle mortgage when you carry out manual work yourself to save on costs.
• Property or land: Existing property that is sold or can be contributed as collateral.
• Inheritances or gifts: Money or assets that you inherit or receive as a gift.

Banks generally like to see buyers who can finance at least 20 % to 30 % of the purchase price and ancillary purchase costs from their own capital. More equity improves the chances of obtaining a favourable loan offer.

What ancillary purchase costs are there in Germany?

When buying a property in Germany, in addition to the purchase price you will also have to reckon with so-called ancillary purchase costs. These amount to 10 % - 15 % of the purchase price and are made up as follows:

• Land transfer tax: The amount of this tax varies between 3.5 % and 6.5 % of the purchase price, depending on the federal state.
• Notary fees: Fees are incurred for the notarisation of the purchase contract and entry in the land register, which generally amount to around 1.5 % of the purchase price.
• Land register fees: Fees are charged for the entry of the change of ownership in the land register, which amount to approximately 0.5 % of the purchase price.
• Real Estate agent's commission: If a real estate agent has brokered the purchase, a commission is payable. This is usually between 3.57 % and 7.14 % of the purchase price including VAT and is shared by the buyer, seller or both parties, depending on the agreement.

Please note that these costs can vary, and it makes sense to take them into account when planning your property purchase budget.

What do I need to consider when taking out a mortgage in Germany?

If you want to finance a property in Germany without a German passport or only with a temporary residence permit, there are some important aspects to consider:

• Equity: It is recommended to bring in a higher amount of equity, as this reduces the risk for the bank and increases your chances of obtaining a loan.
• Proof of income: You must be able to provide proof of a regular and secure income. This gives the bank certainty about your ability to repay the loan.
• Credit rating: A good credit rating is crucial. If you have paid bills or debts on time in the past, this will have a positive effect on your credit rating.
• Residence: You should be registered in Germany and have your main residence here.
• Insurance: It can be helpful to take out term life insurance or occupational disability insurance to cover the loan.
• Loan conditions: Read the terms of your loan agreement carefully and make sure you understand all requirements and obligations. If you have any questions, your Dr. Klein advisor will be happy to help.
• Compare offers: Compare different offers with each other. Use the advice at a mortgage broker such as Dr. Klein, who is familiar with the special features of foreign borrowers.
• Documents: Have all the necessary documents ready, such as your passport, residence permit, payslips and bank statements.

By paying attention to these points, you will improve your chances of successfully obtaining property financing in Germany.

What does the bank check when approving a mortgage?

In order to approve financing for the purchase of a property, the bank carefully examines your financial situation and the details of the property. Here are the main points to check:

• Income: The bank analyses your proof of income to ensure that you have a stable and sufficiently high income to be able to pay the monthly loan instalments reliably.
• Credit rating: Your creditworthiness is checked by means of an enquiry with a credit agency or other information. Positive entries increase your chances of being approved for a loan.
• Equity: The higher your equity, the better the conditions you can obtain. A certain amount of equity, often 20%-30% of the purchase price, is expected by most banks.
• Debts and liabilities: Existing loans or liabilities will be looked at to assess your financial resilience.
• Employment situation: A permanent employment contract or a long-standing successful business have a positive effect.
• Value and condition of the property: The bank estimates the value of the property by means of an appraisal or valuation to ensure that the property is sufficient as collateral.
• Additional costs: The bank also takes into account whether you are able to bear the additional costs of the property purchase.
• Future prospects: Sometimes your professional and personal future prospects are also taken into consideration.

After this assessment, the bank will decide whether to grant you a loan and on what terms. The decision is based on whether the risk of default is considered acceptable.

What is SCHUFA?

SCHUFA is an organisation in Germany that collects information about people's financial reliability. Every time you open a bank account, take out a mobile phone contract or apply for a loan, for example, this is recorded by SCHUFA. SCHUFA creates a report showing your payment behavior. This report and your SCHUFA rating, also known as your ‘score’, help banks and landlords to decide how reliable you are when it comes to handling money.

Having a good SCHUFA rating means that you are likely to pay your bills on time and repay debts regularly. Having a good SCHUFA Score is essential for getting loans and signing rental agreements. Hence, a negative SCHUFA Score could be an impediment for receiving a loan. That's why it's important to manage your finances carefully and always make payments on time.

How much does a home cost in Germany?

The median purchase price for a private flat in Germany in 2024 is 275.587 €. For new-build homes, the median purchase price is 543.906 € and for existing properties you pay 358.355 €.

Property prices can deviate significantly from the median prices. In metropolitan regions in particular, you can expect high prices due to strong demand. In rural regions, on the other hand, purchase prices are more favourable.

Can I receive a subsidy for my mortgage in Germany?

As an expat, you can also receive state subsidies for your property purchase. These subsidies are mainly offered by the Kreditanstalt für Wiederaufbau (KfW) and include low-interest loans and grants. The support programmes include:

• KfW-Wohneigentumsprogramm: Here you can obtain favourable loans for the purchase or construction of owner-occupied property.
• KfW-Energieeffizient Bauen und Sanieren: If you want to build energy-efficiently or renovate your existing property to make it more energy-efficient, KfW offers special loans and investment grants for this purpose.

In some cases, you can also take advantage of regional funding programmes from the federal states or local authorities. These programmes aim to support the construction or purchase of residential property. Our mortgage specialists will be happy to advise you on these programmes and show you which subsidies are available.

What security does the bank receive when it grants you a loan?

If you finance a property in Germany, the loan is entered in the land register as a land charge. The land register is an official document that states who owns the property. A land charge means that the bank receives the property in return for the loan.

If you are no longer able to pay your debts, the bank can auction off your property and use the proceeds to pay off your debts. Once you have paid off the loan, you can delete the land charge from the land register.

What happens if I want to sell my property again?

If you want to sell your property in Germany while the loan has not yet been fully paid off, there are several points to consider:

• Loan redemption: you must repay the remaining debt on your property loan to the bank. This is normally done from the proceeds of the property sale. If the sale price is higher than the residual debt, you are entitled to the difference. However, if the sale price is lower, you will have to make up the difference from your own funds.
• Early repayment penalty: If you repay the loan early, the bank can demand an early repayment penalty. This is intended to compensate for the loss of interest that the bank suffers as a result of the early repayment. However, if your mortgage has been running for at least 10 years, you have the right to special cancellation in accordance with Section 489 of the German Civil Code. You then do not have to pay an early repayment penalty.
• Tax on profits: In Germany, you may have to pay tax on the profit from the sale of a property. If you have owned the property for less than 10 years, speculation tax is payable on the profit realized. However, if you sell after owning the property for more than 10 years, the profit is generally tax-free. The tax also does not apply if you have lived in the property yourself.

When selling a property, it is advisable to seek advice from a tax consultant or a specialist property lawyer to clarify all legal and tax aspects.

When can I cancel my mortgage?

As a borrower in Germany, you have the right to cancel your mortgage under certain conditions:

• Cancellation after 10 years: Under Section 489 of the German Civil Code (BGB), you have the right to cancel a loan agreement with a fixed interest rate after 10 years have passed since the loan was paid out in full by giving 6 months' notice without having to pay an early repayment penalty.
• Cancellation if the property is sold: If you wish to sell the financed property, you can cancel the loan. In this case, however, the bank may demand an early repayment penalty.
• Cancellation in the event of an interest rate adjustment: As a rule, you have no right to cancel your financing during your fixed interest rate period. However, if you have a variable interest rate or the fixed interest rate expires, you often have the option of cancelling or rescheduling the loan.
• Special right of cancellation: Some loan agreements contain the option of special repayments or a special right of cancellation. The conditions for this should be set out in the loan agreement.
• Extraordinary cancellation: In special cases, such as a significant deterioration in your financial circumstances or a significant reduction in the value of the property, the bank can also cancel the loan.

It is important to check the conditions of the loan agreement carefully and to find out in advance about the possible costs of cancellation, such as the early repayment penalty. If necessary, you should seek professional advice in order to make the best decision for you.

Can I buy a property abroad?

German banks generally only finance property that is located in Germany.

Best direct mortgage broker

Excellent conditions

In a study conducted in 2022 by Deutsches Institut für Service Qualität (DISQ), Dr. Klein ranked first in the category "conditions for direct mortgage broker."

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