Getting
A Mortgage In Germany
Should
I Get A UK or German Mortgage?
The
German mortgage market is fairly conservative
- indeed, older British buyers will find it reminds them of
the UK mortgage market 25+ years ago!
Although things are slowly becoming more flexible, UK buyers
might find it preferable to raise finance in the UK - from a
remortgage or other secured loan.
What's best for you really depends on your circumstances and
the type of property you are buying in Germany
- if you aren't sure of your options you should take advice
from an overseas mortgage specialist.
Getting A Mortgage In Germany
One
of the features of the German mortgage system is that a fairly
high deposit is required in all cases. Indeed, many German buyers
are now getting around this requirement by taking both a mortgage
and a loan to fund the deposit!
Some lenders may also require you to show that you have previously
been a reliable saver - requirements vary.
Typical German mortgage terms are based around:
- Loan
of up to 70% of property's value
- Maximum
term of 30 years / until retirement age
- Fixed
interest rate
- Repayment
only
-
Lending multiple of approximately 3x income
If You're Employed
Expect to have to provide comprehensive proof of both your income
and your outgoings when applying for a mortgage in Germany - documents
such as these:
- Last
3 months' payslips
- Last
3-6 months' bank statements
- Last
2 years' P60s
You
will also need a copy of your passport for your mortgage application.
If You're Self-Employed
German
lenders don't generally offer non-status (self-certification)
mortgages, so you will be required to provide full proof of
your and your business' financial status:
- 1-2
years audited accounts
- Last
6-12 months' business and personal bank statements
- Previous
tax returns
You will also need a copy of your passport and may need a letter
from a chartered accountant detailing your personal drawings
from your business.
Rental Income
German lenders will lend to investment buyers
based on potential rental income, but expect very carefully-assessed
and prudent estimations.
Buyers looking for a holiday home that will be let out some
of the time may find they are only eligible under residential
mortgage terms (i.e. without considering rental income).
Read
On
•
Introduction
• Buying A Property
In Germany – 3 Easy Steps
• Should I Get
A UK or German Mortgage?
• Getting
A Mortgage In Germany
• Other Things
To Consider Before Buying In Germany
• Glossary of
Key German Terms
Buying
Overseas Property and Mortgages
