How does the KfW subsidy work with my mortgage?
Kreditanstalt für Wiederaufbau (KFW) is a government development bank that offers home builders and buyers various low-interest subsidy programs to help them build or renovate their homes.
There are two forms of KFW subsidy products: one is a directly disbursed grant, and the other is a loan. In the case of the loan, there is also the special form “loan with repayment subsidy”, where you do not have to repay the loan amount in full.
It is possible to combine different subsidy programs. Our financing experts can help you determine whether your case qualifies for the following products:
KFW Home Ownership Program 124 (KFW-Wohneigentumsprogramm)
The KFW homeownership programs are designed to support the purchase or construction of a home or the purchase of cooperative shares. Important to know: These loans are only for buyers who want to purchase or build a property for their own use.
The following is an overview of the terms and conditions of the KFW 124 program:
Loan amount: up to 100,000 euros
Payout: 100%
Either as an annuity loan with a fixed interest rate of 5 or 10 years or as a bullet loan with a term and fixed interest rate of 4 to 10 years.
The bullet loan needs to be repaid fully at the end of the 4-10-year fixed interest period, which creates very high repayment burdens. For the annuity loan, you can take 25–35 years to pay, which is much more favorable for most customers.
The loan can be drawn down either in one sum or in installments within 12 months of commitment. If required, the commitment period can be extended to up to 36 months, although commitment interest of 0,15% per month will then be charged on the loan, not the amount yet drawn down.
Early repayment of the entire outstanding loan amount is possible, but only against payment of an early repayment penalty. Unscheduled repayments of part of the outstanding loan amount are not possible.
If you are buying the property or cooperative shares for your own use, you may be eligible for the loan. Our financing experts will check for you whether you are eligible for the subsidy and how it can be combined with other subsidy options, if applicable. Arrange a free consultation appointment now.
Since 07/01/2021, you can also apply for new development loans and grants from the “Federal Support for Efficient Buildings (BEG).” They are intended for a new building or the renovation of an efficient house, as well as individual energy-related measures. Comprehensive information on the new federal funding can be found on the KFW website.
This was last updated on 03/05/2024.
