Can Foreign Buyers Get a Mortgage in Germany?

Two questions come up again and again from people looking at German property: can I get a mortgage in Germany at all if I am not a German citizen, and how much can I actually borrow?

The short answer to the first question is yes — but it is not simple, and there are many points to consider. Foreign investors can get a mortgage from a German bank to invest in German property, but German banks operate under close and strict financial regulation, and there are many rules to satisfy. Verifying income is difficult for a bank when the applicant lives in Asia and does not work for an international company; it becomes even harder if the applicant is self-employed, because the rules for annual accounts differ. Because of this, German banks fall back heavily on the security of the deal itself.

How Much Can You Borrow?

The answer depends on your project, but as a rule of thumb it works out at 50–75% of the purchase price or, for a new build, the total construction cost.

German mortgage law distinguishes between a “first-charge” mortgage and lending above that level. A first-charge mortgage is defined as up to 60% of the loan value, or roughly 50% of the purchase price or actual production cost. Lending at this level is considered very safe and is available at almost any time — in practice, this means a foreign investor can typically obtain a mortgage of around 50% of the purchase price or production cost on this basis alone.

On top of that, if the mortgage bank can verify that the investor’s personal finances are safe, clear and stable enough that a larger mortgage carries no real risk, the bank may extend a further 20–25% of mortgage lending. Combined, this is where the overall 50–75% range comes from.

You should also budget for notary, court and property-management fees, which together typically add up to no more than 12% of the purchase price or production cost. In other words, you will generally need to bring 40–65% of the purchase price or production cost in your own funds — enough to cover the deposit and these additional costs. The investor’s own financial position, and the individual bank’s appetite, both matter a great deal here.

Whether the property is for your own use or for rental also affects how much you can borrow. Banks that handle German mortgages (not every German bank does) are closely supervised by German financial regulation and by the European Central Bank. They must carefully verify an applicant’s creditworthiness and scrutinize the underlying project in depth, including likely rental yield or resale prospects. Commercial and residential mortgages are treated differently: a commercial mortgage usually depends on the property type, its size, the rent it generates and the availability of other guarantees — in short, what happens to your commercial project if your tenant or business does not continue operating. Commercial mortgages are usually priced higher than residential ones, and German banks apply higher amortization requirements to limit the credit term to 10–20 years. Proof of creditworthiness is still required, since German banks do accept companies as borrowers.

Buying Through a Company

Many foreign investors buy through a German company they set up or acquire for the purpose. Doing so lets a German bank move from the private-borrower approach to the commercial-borrower approach. The requirements for a company or commercial borrower are less strict than for an individual — the mortgage bank focuses more on the project itself, checking mainly the company’s actual financial position. If a foreign investor does not work for an international company or as an entrepreneur, buying through a company can therefore open up better and more numerous chances of securing a higher mortgage. In this structure, the size of the mortgage depends mainly on the quality and profitability of the investment project.

Residential Mortgages Are More Complex

Financing for a residential project is sometimes more complicated than for a commercial one. Consumer protection matters a great deal in Germany, though in practice it often ends up limiting what is available to the very people it is meant to protect — particularly since the EU leaves each member state to manage the detail of its own law, and Germany has stricter rules than some other countries. For every residential mortgage, German banks must apply the “Wohnungsbaukreditrichtlinie” (a directive on residential building credit). In practice, this means the bank must verify the applicant’s credit standing both at the time of lending and throughout the whole credit term — including confirming when the applicant will retire, and by when the mortgage must be repaid at the latest.

Fixed Rates and the Land Charge

Much of the rest depends on your fixed interest rate. German banks set a fixed rate for the mortgage; during that period the rate cannot change. After it ends, you negotiate a new period at what is then a new, but again fixed, rate — that later rate is your risk. You can choose a fixed-rate period anywhere from five years up to the length of the whole loan term; the fixed-rate period is not the same as the credit term, and borrowers typically have more room to choose within the credit term. As of March 2026, Bundesbank data puts the effective rate on new German residential mortgages at roughly 3.72% overall, and about 3.74% for rate-lock periods over 10 years — substantially higher than the 2021 figures quoted in the original source. Check the current month’s rate before you commit. On top of interest, you will also pay amortization of at least 1% a year, more commonly 2% a year, and possibly further fees depending on negotiation.

Every German bank registers a land charge (Grundschuld) against the property in the land registry, typically in first rank. This is standard practice and not itself a cause for concern.

Because there are many further conditions that can make it hard for a foreign investor to obtain a German residential mortgage, the practical route that tends to work is combining a commercial-style application with residential-style documentation — though not every German bank will structure things this way, so you need someone experienced to prepare the application for you. Sometimes this means bringing in a good lawyer and a tax adviser, but doing so need not be complicated or slow. Finding the right approach from the start of the application is what matters most. For help structuring a mortgage application as a foreign buyer, ask Zagdim.

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