Mortgage in Germany for Expats: 2026 Guide

A mortgage in Germany for expats, called a Baufinanzierung, works like a mortgage anywhere: you borrow against the property, you repay in monthly instalments, and the bank enters a charge on the land. What differs is the detail: high buying costs that you pay in cash, long fixed-rate periods, and a notary who carries out the sale. This guide explains what lenders look at, what you must bring, which costs come on top of the price, and how the purchase runs. It is neutral and does not recommend any bank, broker or product.

Quick answer: how a mortgage in Germany works for expats

Can foreigners get a mortgage in Germany?

Yes, but each lender sets its own rules. A bank does not approve a nationality, it approves a risk: will you be able to pay for the whole fixed-rate period, and is the property enough security? For expats the practical questions are usually these:

• Residence status. Lenders want to know how long you can stay. A permit tied to a visa, a Blue Card or a settlement permit tells them something about the next years, so bring the permit and be ready to explain your plans. See our EU Blue Card guide and the visa guide for the permits.
• Job and probation. A permanent contract is the strongest proof of income. If you are still in the probation period or on a fixed-term contract, some lenders wait, ask for more equity, or look at your whole situation. Others are more flexible, so do not rely on the first answer.
• Income history. Payslips, your employment contract and your tax assessments are the normal proof. See the salary guide and net salary calculator guide for what stays after deductions.
• A German bank account and credit history. You will need a German bank account, and a Schufa record helps, as explained below.

As a rule of thumb from the Verbraucherzentrale, many banks consider a monthly loan instalment of up to 40 percent of your net income acceptable, and they advise keeping around 10 percent of room between your surplus and the instalment. That is an average, not a fixed limit.

How much equity do you need?

Equity (Eigenkapital) is the money you bring yourself: savings or a gift from family. Ask the lender what else it accepts. The Verbraucherzentrale writes that banks often ask for 20 percent of the total costs from your own funds, and it notes that this share will in most cases cover the loan if you have to sell later. With less equity, lenders may still say yes, but interest rates tend to be higher and the risk is yours.

"Total costs" means the price plus the buying costs, not the price alone. If your equity comes from abroad, keep proof of where it came from, and see the bank account guide for moving money into Germany.

Buying costs (Nebenkosten) on top of the price

The Verbraucherzentrale says the extra costs of buying can already reach 10 percent of the purchase price. They come on top of the loan in most cases, so plan to pay them from savings.

Land registry costs are court fees and not notary fees, although people often talk about them together. The Bundesnotarkammer says the buyer generally bears the notarisation costs.

Transfer tax (Grunderwerbsteuer) by state, 2026

The states set their own rate. The Federal Government states that it ranges from 3.5% to 6.5% of the purchase price depending on the state. The table shows the rates that apply in 2026 according to current state-rate overviews. Bremen, Hamburg and Saxony match the official state sources; the other rates come from commercial overviews that agree with each other, so confirm yours with your notary or the state finance ministry. Rates can change with a state law, so ask your notary which rate applies on the day of signing.

The tax is normally calculated on the purchase price, and you must pay it before you can be entered as the owner. Transfers between spouses are exempt from the tax (§3 GrEStG).

Estate agent fee rules since December 2020

For flats and single-family homes, a federal law passed in 2020 changed who pays the agent. The rules in the Civil Code are:

• If an agent wants a fee from both sides, both sides must promise the same amount (§656c BGB).
• If the agent works for one side for free, the agent cannot charge the other side. A waiver for one side also benefits the other, and these rules cannot be changed by contract.
• If only one side hired the agent, a clause that makes the other side pay is valid only if the side that hired the agent stays liable for at least the same amount, and the other side pays only after the first has paid and proof is shown (§656d BGB).

In practice this often leads to a split of the fee, but the exact share is a matter of the agent contract. The Verbraucherzentrale gives 3 to 6 percent of the price plus VAT as the usual size of the fee. Ask the agent in writing who owes what before you reserve a property.

Interest rates and the fixed-rate period (Zinsbindung)

The fixed-rate period is the time for which the interest rate in your contract stays the same. After it ends, you either repay the rest, or agree a new rate (Anschlussfinanzierung). The longer the period, the more certainty you have, and the lender usually charges a bit more for it.

Source: Deutsche Bundesbank, interest rate statistics for housing loans to households in Germany (series SUD118 and SUD119), data as published on 1 October 2026. These are averages across all lenders, weighted by volume. Your offer will differ with your equity, the property and your profile, and rates move every month. Use the figures as a reference point, and ask lenders for current offers.

What the Verbraucherzentrale advises

• Agree a fixed-rate period of more than 10 years. Most lenders offer 15 or 20 years.
• Be careful with short periods: if rates have risen when the period ends, the follow-on loan can raise your monthly cost a lot.
• By law you can terminate a loan with a fixed rate after 10 years from full payout, with six months' notice (§489 BGB), and this right cannot be removed by the contract.

Compare offers by the effective interest rate (Effektivzins), which includes the main costs of the loan, and by the conditions: special repayments, the right to change the repayment rate, and what happens if you sell early.

Repayment (Tilgung) and what it does to your payment

Most German mortgages are annuity loans (Annuitätendarlehen): you pay the same monthly amount during the fixed-rate period, and over time the share that repays the loan grows while the interest share falls. The Verbraucherzentrale calls this the simplest and usually the best form, and recommends an initial repayment of at least 2 percent, and more if you can afford it. It gives the example that with 1 percent initial repayment and about 3 percent interest a loan can run for over 46 years, while 3 percent repayment clears it in a little over 23 years, and it advises planning so that the loan is paid by the time you retire.

The Verbraucherzentrale suggests negotiating yearly special repayments (Sondertilgung) of 5 or 10 percent of the loan. If you sell during the fixed period, the lender may claim compensation (Vorfälligkeitsentschädigung, §490 BGB). If you may leave Germany in a few years, think about this point first, because a short stay and a 15-year loan do not fit well together. See our taxes guide and the tax return guide, and ask a tax advisor from our professional help guide for your case.

KfW programmes for buyers

KfW is the state-owned development bank. It does not lend directly to you: you apply through a financing partner, such as a bank or savings bank. We list only the programmes we checked on the KfW pages, and you should check the current terms before you apply, because you usually must apply before the project starts.

For programme 300 you must not already own a home in Germany and the home must be your only residential property there. Ask your bank for the current KfW rate.

The role of Schufa

Schufa is the main credit bureau in Germany. Lenders look at your Schufa record to see whether you have paid loans and bills on time. If you arrived recently, you may have no record at all, which is not a negative score but means the lender has less information. Our Schufa guide explains how to request your own record and how a record builds up, and a German bank account with regular salary payments is a good start.

Mortgage broker or bank: how to choose

Either route can work. Ask for written offers and compare the effective rate, fixed-rate period, special repayment and early exit terms.

Buying process step by step

1. Set your budget. Add the price, the buying costs and the renovation budget. Check your equity and the monthly payment you can carry.
2. Get a financing confirmation. Talk to lenders or a broker, bring your documents, and ask for a written, non-binding approval in principle.
3. Find a property and check it. Check building permits, land charges and condition. The Bundesnotarkammer lists these as the buyer's own task.
4. Reservation. Sellers or agents sometimes ask for a reservation agreement. It is not the purchase contract, and a binding sale only arises at the notary, but read what a reservation fee commits you to, and what happens to it if the financing fails.
5. Receive the draft contract. In a consumer purchase, the notary should send you the draft about two weeks before the appointment (§17 BeurkG), and the notarisation may take place at the earliest two weeks after you receive it. Use the time to ask the notary about anything you do not understand.
6. Notary appointment. The contract is read out loud and explained, and it becomes binding when you sign. Side agreements must be in the notarised contract.
7. Priority notice and due-date notice. The notary enters a priority notice (Vormerkung) in the land register, which reserves the property for you. When all conditions are met, you receive the due-date notice (Fälligkeitsmitteilung), and the bank can pay its share directly to the seller.
8. Pay the tax. The tax office sends the transfer tax bill. After you pay, it issues a clearance certificate (Unbedenklichkeitsbescheinigung), which is required to change the owner in the land register.
9. Entry in the land register (Grundbuch). After the price and the tax are paid, the notary applies to register you as the owner.
10. Register and insure. Do your Anmeldung at the new address, and look at your insurance, for example liability insurance.

Checklist for expats

• Collect your residence permit, employment contract and recent payslips.
• Open a German bank account and request your Schufa record.
• Add up your equity and note where it comes from.
• Match the fixed-rate period to how long you plan to stay.
• Compare written offers by effective rate and terms, and ask who pays the agent.
• Plan the follow-on financing about a year before the fixed period ends, and keep your long-term plans in view, see the pension guide.

FAQ

Sources

Figures checked on 16 October 2026. This guide is general information, not financial or legal advice. Confirm your own case with a lender, a notary and a tax advisor.

• Transfer tax range of 3.5% to 6.5% by state: Bundesregierung, Drucksache 21/5776 (6 May 2026); Verbraucherzentrale: Immobilienfinanzierung: So berechnen Sie, was Sie sich leisten können
• Transfer tax in Bremen (5.5% from 1 July 2025): Service Bremen, Grunderwerbsteuer; Hamburg (5.5%): hamburg.de, Grunderwerbsteuer; Saxony (5.5%): Sächsisches Grunderwerbsteuersatzgesetz
• Other state rates in the table follow commercial state-rate overviews (steuerschroeder.de and baufi24.de, which match each other). Check your state's finance ministry before you rely on them.
• Exemption between spouses: §3 GrEStG
• Agent fee rules: §656c BGB, §656d BGB
• Notary and land registry costs of 1% to 1.5%, agent fee of 3% to 6% plus VAT, 40% rule of thumb, repayment advice: Verbraucherzentrale, what you can afford
• Equity of 20% of total costs, buying costs up to 10%: Verbraucherzentrale, Häufige Fragen rund um Hauskauf und Hauskredit
• Fixed-rate period, 2% repayment, special repayments, annuity loan: Verbraucherzentrale, Immobilienfinanzierung: Modelle
• Termination rights and early repayment compensation: §489 BGB, §490 BGB
• Interest rates (August 2026: 4.04% over 10 years, 3.81% over 5 to 10 years, provisional): Deutsche Bundesbank, Wohnungsbaukredite an private Haushalte
• KfW home ownership programme 124: KfW, Wohneigentumsprogramm (124); families programme 300: KfW, Wohneigentum für Familien (300)
• Buying process, priority notice, due-date notice, clearance certificate, buyer pays notarisation: Bundesnotarkammer, Infoblatt: Der Kauf einer gebrauchten Immobilie; two-week draft period: §17 BeurkG