How does the KfW subsidy work with my mortgage?

The Kreditanstalt für Wiederaufbau (KfW) is a German government owned development bank that offers homebuilders and buyers various low interest mortgage programs to help buy, build or renovate a home. Note that borrowers can combine different KFW programs, so understanding the options is important. Our experts can help you work with lenders to see if you’re eligible for the following products:

KfW Residential Property Program 124:

KfW promotes the purchase or construction of your first home in Germany:

  • Borrow up to 100.000 €

  • Interest rate from 0.84 %

  • 5-10 years fixed interest period

  • 1-3 years repayment free period

  • 4-25 year repayment period

You may be eligible if this is your first house that you are buying for own-use. The main benefit of the KFW loan is often that it reduces the interest rates on the bank loan that you need to fund the full purchase. The main drawbacks are that your repayment rate is relatively high, and the interest fixation is no longer than 10 years. This can lead to unfavorable outcomes if you combine it with a bank loan with longer fixation. To optimize your mortgage with a KFW loan, discuss this one of our experts in a free call:

Energy Efficient Loan 153:

KfW also promotes home renovation projects that enhance energy efficiency:

  • From 0.75% annual interest rate plus a subsidy of up to 30.000 € to help repay the loan.

  • Properties qualifying as a “KfW Efficient House” can apply for a grant up to 120.000 €, or up to 50.000 € for renovation.

This was last updated on 8.12.2020

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