Arenja & Raj FinanzTwo pots, not one
Almost every confusion about German deposits comes from treating these as the same thing. The first is a floor you must clear to transact at all. The second is a dial that changes the price of the loan.
The realistic levels
| What you have | What it means | Practical position |
|---|---|---|
| Below the purchase costs | cannot cover the unfinanceable part | not yet ready in most cases |
| Purchase costs only | 100 % financing of the price | possible, higher rate, fewer lenders |
| Costs + 10 % | 90 % loan-to-value | comfortable, modest premium |
| Costs + 20 % | 80 % loan-to-value | the standard good position |
| Costs + 30 % | 70 % loan-to-value | best available conditions |
The shape matters more than the exact figures. Going from 20 % to 30 % improves the rate a little. Going from 10 % to nothing changes both the rate and how many banks will speak to you.
Working out your own number
Take the price you are aiming at. Add your state's purchase costs — 5.5 % in Bavaria without an agent, up to about 12 % in North Rhine-Westphalia with one. Then add the deposit level you are targeting.
On a €400,000 flat in Hamburg without an agent: €30,000 of purchase costs, plus €40,000 for a 10 % deposit, gives €70,000. With an agent it is closer to €84,000. That is the savings target, and it is usually a larger number than people carry in their heads.
Two adjustments worth making. Keep a reserve on top — a kitchen, a move, and the repairs that appear in the first year are real. And if you are self-employed, plan for 20 % rather than 10 %, because that is what lenders will expect.
What counts as equity
Savings and current accounts. Fixed deposits and securities, usually valued with a discount for market risk. An existing Bausparvertrag that has reached allocation. Proceeds from selling another property. A documented family loan, at most banks, provided it is subordinated and not repayable on demand — and a gift, which is simpler still, subject to gift tax allowances.
What generally does not count: unvested stock, money you would need to borrow elsewhere, and funds that cannot be traced. Banks ask where equity came from, and an unexplained recent deposit invites more questions than it answers.
Saving faster versus buying sooner
This is the actual decision, and it has no universal answer. Waiting two years to move from 10 % to 20 % improves the rate and reduces the loan. In the same two years you pay rent, and prices may move against you by more than the interest saving.
What tips the balance is usually how close you are to a lending band. Being €8,000 short of 10 % is worth another few months of saving, because the improvement is concentrated at that boundary. Being at 22 % and pushing for 30 % is a much weaker case for delay.
Where the money can come from
| Source | Counts as equity? |
|---|---|
| Savings and current accounts | yes, straightforwardly |
| Securities and funds | yes, usually with a discount for market risk |
| Allocated Bausparvertrag | yes |
| Gift from family | yes, subject to gift tax allowances |
| Loan from family | usually, if subordinated and not repayable on demand |
| Consumer loan | no — it is debt, and it reduces your capacity |
| Unvested shares or options | no |
| Cash without a paper trail | no |
Banks ask where equity came from and expect an answer with documents behind it. Money that appeared recently and cannot be explained creates more problems than the amount is worth.
Building the deposit while you wait
The uncomfortable truth is that a savings plan competes with a rising market, and the outcome depends on which moves faster. What you can control is the shape of your own side.
Keep the deposit somewhere liquid and boring. Equities are the wrong home for money you will need on a fixed date within a few years, and a bank will discount them anyway. Avoid new consumer credit entirely — a €400 monthly car payment can reduce your borrowing capacity by six figures, which is a far worse trade than it looks.
And if family support is a possibility, discuss it early. Documented gifts and properly structured family loans both count; a transfer that arrives the week before the application looks like something else.
Budget calculator
Run your own numbers
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How much deposit do I need to buy a house in Germany?
At minimum, enough to cover the purchase costs — 7.5 % to 15 % of the price depending on your state — because banks do not finance them. Most lenders then want 10 % to 20 % of the price on top as equity, and the interest rate improves as that share rises.
Can I buy with no deposit at all?
Only through 110 % financing, where the loan covers both the price and the costs. Few lenders offer it and it requires a very strong, secure income and a clean credit record. It is not realistically available to most buyers, and it carries the highest rate.
Does a family gift count as a deposit?
Yes, and it is treated as your own funds. A documented loan from family also counts at most banks if it is subordinated to the mortgage and not repayable on demand. Either way the bank will ask for the paper trail, so it should be documented at the time rather than reconstructed later.
How much deposit do I need if I am self-employed?
Plan for around 20 % of the price plus the purchase costs. Lenders apply stricter equity requirements to variable income, and full financing for self-employed applicants is much rarer than for employees.
Should I use all my savings as a deposit?
No. Keep a reserve for the move, a kitchen if the flat has none, and the repairs that turn up in the first year. Arriving at the notary with nothing left over is how people end up taking an expensive consumer loan three months after buying.