Frequently asked questions

MyMortgageGermany.de is a licensed German mortgage broker.

MyMortgageGermany.de breaks down the mortgage-buying process into a series of easy-to-answer questions. We do all of this online, simplifying the issues related to securing a mortgage and keeping our costs down so that we can pass those savings on to you, the client.

We ask questions related to affordability, the reasons behind buying a house and the kind of mortgage that best suits.

This approach is more logical to the client, more transparent for everyone, and easier overall.

MyMortgageGermany.de demystifies aspects of the mortgage application process, empowering our clients to make the right decision in getting the very best deal on their mortgage and securing a healthy financial future.

Our software allows clients to get unbiased, unweighted advice related to mortgage and loan offerings from hundreds of lenders based on our clients’ unique financial circumstances. We then streamline those mortgage offers to choose the most suitable for our clients. Note that choosing the right loan product can save you thousands or even tens of thousands over the lifespan of the mortgage.

In the constantly evolving world of finance, mortgage lenders frequently update their offers, often to remain competitive with other lenders. The details in your profile are not likely to change quite so quickly. By maintaining your profile information, MyMortgageGermany.de will be able to offer you, the client, the best possible mortgage products that are most suited to your financial circumstances. Your data will be encrypted and stored on our servers (our technology is fully compliant with EU law) to enable us to provide you with updated offers and details about the changing nature of mortgage products.

There is no charge for clients to use our service. MyMortgageGermany.de is paid by the lender rather than the borrower, so the banks pay MyMortgageGermany.de for processing your mortgage application, just like any other mortgage broker.

As we step through the process, every question that we ask determines the kind of mortgage that best fits your situation. By narrowing the parameters, question by question, MyMortgageGermany.de determines which mortgage offerings (a) will be available to you and (b) which mortgage offerings will be most suitable for your financial situation.

For example, we will ask you if and how you expect your income to grow over time. This can affect which mortgage products are the best fit, because certain mortgages, for example, may have different repayment processes, with interest and lump-sum repayment rates at different ratios over the lifetime of the mortgage. All of your responses will influence how we go about getting the best possible loan product for you.

A potential client’s ability to pay the mortgage is central. Other elements, such as whether the client has collateral – property in another country, for example, and therefore more leverage in acquiring a better product, can also be determined. We consider factors such as your age, the ability to pay, whether this might improve over time, and what term length the client prefers.

Stress tests are undertaken at MyMortgageGermany.de to determine what our clients can afford, even if the situation were to take a bad turn for them financially. The ultimate decision is made by the client but being forearmed is forewarned and we want our clients to make the choice of mortgage in as informed an environment as possible. Property buying is, after all, one of the most important financial decisions a person can make in the course of their lifetime.

We work with all the major lenders throughout Germany and many of the small ones too – that’s over 400 lenders!

We would like to obtain as much relevant information from you as possible so that the bank can make as informed a decision as possible about whether they are confident in giving you a mortgage.

This information includes your age, your annual earnings, your household income, how much money you have saved for a deposit, the length of your stay in Germany, the likelihood you will stay for shorter or longer periods of time, whether you will live in the property or if you anticipate renting it out, the likelihood that your income will increase and how quickly, and whether this kind of investment is the right fit for you.

There are a number of factors involved in deciding whether to rent or buy.

If you’re living in a similar home already, as a tenant, and you think that you’d be better off buying a property of its kind instead of throwing your money at a landlord, you might be onto something!

Interest rates are very low in Germany at present, and property prices are generally rising. These are two strong reasons to consider seeking a mortgage.

How long do you anticipate staying in Germany? Will renting the property out when you leave Germany cover the costs of the mortgage, when you factor in other costs such as maintenance and management fees?

The property itself will play a factor in whether you ought to buy or rent, in terms of cost. Old-build homes are more costly to retrofit with greener, energy-saving elements related to insulation, glazing and heating. You may be compelled to upgrade an older property under the law once you commit to buying it. However, these costs won’t impact on your property-purchasing plans if your home is a new-build or if the house has been already modernised.

Like elsewhere in the world, the mortgage is an arrangement between a borrower and a bank or financial institution, where property is used as collateral. The borrower purchases the property and pays back the principal sum of the mortgage, and an agreed-to interest rate, over a period of time. The interest rate is often set as fixed for a period of time, as is the rate of repayment.

We can determine that together, using our mortgage calculators. Selecting the right mortgage depends on your financial situation and your goals. Whether you are planning to live in your new home or you are buying-to-let, our mortgage calculators will help you estimate the loan amount and the monthly repayment value that you can afford over the course of your mortgage term. Our expert mortgage advisors are on hand to guide you through the process so why don’t you get started now and open the door to your future.

Each bank will have their own criteria as to what documents are required prior to submitting a mortgage application. However, you will need to confirm your identity, prove your income and earnings, show your savings if applicable and provide a list of documents related to the property you’re purchasing, which can be obtained from the seller / the estate agent.

Once the most suitable mortgage has been selected your MMG mortgage advisor will provide you with a full list of documents for that particular bank that can be easily and securely uploaded in your own client portal.

See our document checklist for an overview of what’s generally required.

Yes. Recently some lenders have started issuing a “Finanzierungszertifikat” prior to providing full mortgage approval. However, be aware this is a relatively new feature in Germany and currently only a few lenders provide this letter.

A “Sondertilgung” is a feature that allows you to overpay on your mortgage, thus lowering the outstanding balance and / or term of your mortgage. Some banks allow you to overpay 5% of the original loan amount annually and will include this as standard in your loan conditions. Some banks will charge a small premium added to the interest rate for offering you this facility. You can even overpay by 10% but this will typically cost you a few basis points added to your mortgage interest rate. You can see the affect of making a “Sondertilgung” payment in our mortgage calculator.

The BZF is an interest free period of time granted by the lender for funds that have been made available for you but have not yet been drawn down. When the interest free period ends the lender will then charge you a rate of interest on the funds even if they have not yet been used. This rate is typically 3% per annum charged at 0.25% per month!

For example, if you are borrowing €500k for an apartment that is not scheduled for completion for another 12 months with the terms of your mortgage specifying a 6 month “BZF” only, you will be charged 0.25% by the lender for any funds being available but not yet drawn down at the end of the BZF period. This could mean that if you have only utilised €200k out of the €500k within the first 6 months, you will be required to pay interest on the remaining €300k during months 6 to 12. €300k x 0.25% = €750 per month just for the funds being available!

This characteristic of German mortgages is quite often unknown to expats who can fall foul of this particular feature. Seeking independent advice when searching for the right mortgage can avoid this along with any other potential issues.

No, you cannot change the rate of interest within the agreed fixed period of the loan.

Usually 6 months before the end of the fixed term your bank will write to you confirming the end of the fixed period and will offer you a new rate for a new fixed term. However, you will have the option to shop around on the open market at this time. Your new rate will depend on where interest rates are at that point in time.

Yes, you can. However, there will be an early redemption fee for this should you be in a fixed rate. The penalty amount will depend on how much interest is still owing for that particular fixed rate. Lenders have different criteria on this, but you can find a “Vorfälligkeitsentschädigungsrechner” easily online to calculate an estimate of your early redemption penalty.

Normally a mortgage will be fixed for a period of 10 years. Sometimes a 5 year fixed period is possible and some banks will fix the loan for up to 30 years.

Yes, you can. However, if you are in the first 10 years of the mortgage there will be an early pay-back penalty. On the other hand, if you are more than 10 years into the mortgage you can redeem without any penalty or fee by giving your lender 6 months’ written notice of your intention to redeem.

Yes, as long as the bank’s criteria can be met at that point in time.

100% mortgages are becoming more popular in Germany. However, if you can pay down a percentage of the purchase price you will receive a better rate of interest. Loans in excess of 100% are under certain circumstances available, but usually with more stringent conditions and a higher rate of interest.

The buyer has the right to appoint the notary of their choice, however, in practice the estate agent will usually appoint a notary known to them before the sale of the property is agreed in order to speed up the process.

Yes, the building will have to be insured. If you are purchasing an apartment the insurance certificate will be provided by the building’s manager and if you are purchasing a house it is standard to carry on the previous owner’s insurance.

Life Assurance and Income Protection Insurance are generally not required but are advisable!

Yes, your mortgage will be listed on the German credit register SCHUFA.

Yes, if you buy privately / direct from a seller or a new property from a developer you will save on the estate agent’s fees.

Well, unfortunately the buyer has a few more costs than the seller! They come on top of the purchase price, and they can be anywhere between 5% and 16% of the overall cost of the property. The fees include notary charges, estate agent fees and land register tax. The charges can differ from state to state within Germany.

The seller, meanwhile, has to pay his or her bank in order to delete their mortgage out of the land registry.

Further information can be obtained from your mortgage expert at MyMortgageGermany.de.

Yes, you might be eligible to avail of government subsidies.

For instance, the KfW loan is a subsidised loan from the German State Bank, KfW. Applicants can borrow up to €100,000. This loan can normally, but not always, be obtained at a lower rate than the rate given by the main bank financing your home. The KfW can be used for residential private homes only, and not for investment properties. Under certain circumstances, further rate reductions and further financing can be obtained depending on the efficiency of your home and if special requirements are needed for your home. The only disadvantage to the KfW loan is that sometimes the terms are a little less flexible than your main bank: You may be borrowing money at a lower rate, but your repayment might be a little higher on account of the repayment terms of the KfW. Your MMG mortgage advisor will help you apply for your KfW tranche should it be suitable to your needs.

If you have children, another government program worth knowing about is “Baukindergeld”, the children’s allowance subsidy. Baukindergeld is a €12,000 subsidy organized by the KfW bank for parents buying their own home. The €12,000 is split evenly over 10 years. The main criteria to qualify for this subsidy are:

The Bavarian State offers a further subsidy in addition to the above. Your MMG mortgage advisor can point you in the right direction to apply for Baukindergeld.

The KfW loan is a subsidised loan from the German State Bank, KfW. Applicants can borrow up to €100,000. This loan can normally, but not always, be obtained at a lower rate than the rate given by the main bank financing your home. The KfW can be used for residential private homes only, and not for investment properties. Under certain circumstances, further rate reductions and further financing can be obtained depending on the efficiency of your home and if special requirements are needed for your home. The only disadvantage to the KfW loan is that sometimes the terms are a little less flexible than your main bank: You may be borrowing money at a lower rate, but your repayment might be a little higher on account of the repayment terms of the KfW. Your MMG mortgage advisor will help you apply for your KfW tranche should it be suitable to your needs.

Baukindergeld was a children’s allowance subsidy for parents buying their own home. It was organised by the KfW bank and was valued at €12,000 split evenly over 10 years. The main criteria to qualify for this subsidy were: