How KfW loans help you save money on your German Mortgage

author image

Tatjana Grassl

Oct 27, 2020
background image

Last updated: 27.10.2020

The Kreditanstalt für Wiederaufbau (KfW) promotes the purchase of residential property with various products. You can save up to tens of thousands of euros when buying real estate. Hypofriend shows you which KfW subsidies are available and which conditions apply. 

The KfW provides both loans and grants. First to the loans: 

KfW-Wohneigentumsprogramm (124)

With this product the KfW supports you on your way to your first home in Germany. The important thing here is that you live in the property yourself and do not rent it out. The main benefit is that banks often improve their conditions if you combine it with this KFW loan. The benefit is not the low interest rates, as many people think.

Note that you can also combine the 124 program with other KfW loans.

The conditions: 

  • Loan from 0.84 % effective annual interest rate (with a repayment period of 4 to 25 years)

  • Up to 100,000 Euro loan

  • 1-3 years repayment free period

What is being supported? 

In the case of existing properties, the loan can cover the purchase price, costs for repairs, modernization as well as incidental costs such as notary and brokerage fees and land transfer tax. 

In the case of a new build, it's the costs for the building plot, the construction – such as material and labor costs, costs for the architect, the energy consultant, notary and brokerage fees and land transfer tax as well as costs for outdoor facilities.

Förderung für energieeffizientes Bauen (153)

KfW promotes the purchase or new construction of a KfW Efficiency House 55, 40 or 40 Plus. The decisive factor is the energy efficiency of a property.

  • The project developer can tell you the energy rating on the house.

  • For your own construction project an energy efficiency consultants can tell you what is possible at what price.

The subsidy

  • Loan from 0.75 % interest p.a. (with a term of 4 to 10 years)

  • Loan from 0.95 % interest p.a. (with a term of 11 to 30 years)

  • Up to 120.000 Euro per apartment 

  • Up to 30.000 Euro subsidy in the form of a lower principal repayment 

  • Support by experts for energy efficiency can be subsidized with up to 4000 Euro on top

The conditions:


If you decide to build an energy-efficient house, the first thing you should do is find an energy consultant because the requirements to be fulfilled are complex. The good thing is that the consultant is also supported by the KfW. A checklist of what you should consider when working with the consultant can be found here. 

Also take a look at the other KfW subsidies. You can combine some of them, such as the Baukindergeld or the KfW Home Ownership Program. Afterwards you should discuss and apply for a mortgage with your mortgage advisor. As soon as the construction is completed and you have received the confirmation from your energy efficiency expert, you pass it to your mortgage advisor and receive the repayment subsidy from the KfW. 

What is not supported:

  • Plots of land

  • Vacation homes and apartments 

  • Rescheduling of existing loans 

  • Refinancing of started or completed projects 

Energieeffizient Sanieren (151, 152)

Not only energy-efficient new construction, but also energy-efficient renovation is promoted by the KfW. 

The conditions: 

  • Up to 120,000 euros for the renovation to a KfW Efficiency House or 50,000 euros for individual measures per apartment 

  • 100% payout

  • You can draw down the loan in one sum or in installments within 12 months after the commitment - an extension to a maximum of 36 months is possible

  • From the 13th month after KfW's commitment date, you pay a commitment fee of 0.15% per month on the loan amount not yet drawn


The KfW Grants

Baukindergeld (424)

KfW uses the Baukindergeld to support families on their way to home ownership. The requirement is that the children must still be under 18 years when the application is submitted. 

A look at the conditions: 


  • The number of children for whom you receive the grant is unlimited

  • Household income is defined as the average income of the year before last and the year before last before the application. Example: For applications in 2019, the income of 2017 and 2016 applies.

  • The Baukindergeld is available for a new build and for the purchase of an existing property.

  • You can still obtain Baukindergeld if you sign your purchase contract before 31.3.2021. 

  • You can find a detailed article about the Baukindergeld here

Energieeffizient Bauen und Sanieren – Zuschuss Baubegleitung (431)

When building a KfW Efficiency House or when doing energy-related renovation measures, KfW promotes specialist planning and qualified construction supervision by an external, independent expert on energy efficiency. 

This includes the following tasks:

  • Services for detailed planning

  • Support in the tendering process and evaluation of offers

  • Control of the construction work

  • Acceptance and evaluation of the measures

  • Creating a sustainability certificate


  • Subsidy up to 4.000 Euro

  • Assumption of 50 % of the costs of an expert for energy efficiency

  • For all who renovate or build new living space energetically

  • Also suitable for creating certificates for sustainable building

  • Can only be used together with the KfW products 151, 152, 430 or 153

Energieeffizient Sanieren – Investitionszuschuss (430)

The 430 subsidizes the energy-efficient renovation of residential buildings. conditions: The building application or building notice must have been filed before 01.02.2002 and there must be an expert for energy efficiency involved. The subsidy is up to 48,000 euros for the renovation to a KfW-efficiency house or 10,000 euros for individual measures. The purchase of a renovated property is also subsidized. 



Supported individual measures

  • Thermal insulation of walls, roof surfaces, basement and floor ceilings

  • Renewal of windows and external doors

  • Initial connection to local or district heating

  • Optimization of an existing heating system

  • Renewal or installation of a ventilation system

KfW subsidies – a good option for your german mortgage

Knowing and using the KfW subsidies can save you a lot of money. Whether your planning a new build or want to buy an existing property you will pretty sure find a KfW product that supports your project. Especially when it comes to energy efficiency. This does not only do something good for the environment but helps you to reduce your additional costs eg for heating.

author image

Tatjana Grassl

As Hypofriend’s content writer, Tatjana creates exciting articles about real estate topics.

Looking for a mortgage?

Use Hypofriend's affordability calculator to see what you can afford based on your personal situation.

See what I can afford

Use Hypofriend's affordability calculator to see what you can afford based on your personal situation.