How much property can I afford in Germany?

Buying a home in Germany: the questions people actually ask

How much can I borrow for a property in Germany?

German banks work backwards from what you can repay each month, not from a multiple of your salary. The common guideline is that no more than roughly 40 % of net household income should go to the mortgage payment, with existing loan commitments deducted first. That monthly figure divided by the annuity rate — interest plus initial repayment — gives the loan. On a €4,500 net household income with no other loans, an €1,800 payment at 4.0 % interest and 1.5 % repayment supports roughly €390,000 of debt. Your real limit also depends on your SCHUFA record, how secure your employment is, and what the bank's own surveyor decides the property is worth.

How much of my own money do I need?

Two separate things get confused here. The purchase costs — transfer tax, notary, land registry and any agent commission — run between roughly 7.5 % and 15 % of the price depending on your state and whether an agent is involved. German banks almost never lend against these, so you pay them from your own funds. On top of that, most lenders want to see equity in the property itself: 10 % to 20 % noticeably improves the interest rate you are offered. Financing 100 % of the purchase price is possible but costs more; financing beyond the price is rare and reserved for very strong incomes.

What exactly are the purchase costs?

Property transfer tax (Grunderwerbsteuer) is set by each federal state and ranges from 3.5 % in Bavaria to 6.5 % in Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein. Notary and land registry add roughly 2 %. Where an estate agent is involved, the buyer's share of the commission is commonly 3.57 %. On a €400,000 flat in North Rhine-Westphalia without an agent, that is about €34,000 in cash — before you have bought a single lamp.

Can I buy property in Germany as a foreigner?

Germany places no restriction on who may own property. Citizenship and residence status do not limit ownership itself. Financing is the harder part. Banks look at your residence permit and how long it runs, your employment contract, and your payment history in Germany. A permanent residence permit or an EU Blue Card makes matters considerably easier than a permit tied to a fixed-term job. Some lenders decline applications where the permit expires inside the fixed-rate period; others do not. This is precisely where an independent broker earns their keep, because the answer differs from bank to bank on identical facts.

Where does the 40 % rule come from?

It is a rule of thumb, not a law. It leaves room for the running costs an owner carries and a tenant does not: building insurance, a maintenance reserve, property tax and the repairs a landlord would otherwise handle. Banks run their own affordability calculation, usually a household budget with standardised living-cost assumptions per adult and child. Some will go beyond 40 % for high earners, because someone with €10,000 net has more left after 45 % than someone with €3,000 net has after 35 %.

How long should I fix the interest rate?

German mortgages let you fix for anywhere from 5 to 30 years, and 10 or 15 years is the usual choice. A longer fix costs a slightly higher rate and buys certainty. Worth knowing: after ten years you gain a statutory right to terminate the loan with six months' notice, whatever period you agreed. That makes a 15-year fix far less rigid than it looks on paper.

What does this calculator not tell me?

It gives you the realistic order of magnitude before you speak to anyone — not a lending decision. The actual offer depends on the property valuation, your SCHUFA record, the security of your income, your residence status and each lender's individual conditions, which routinely differ by more than a full percentage point on the same case. It also stops at the purchase: property tax, building insurance, the service charge on an apartment and a maintenance reserve all continue afterwards.