What is a mortgage?

In Germany, just like in most places around the world, a mortgage is a formal contract between you and a lender enabling you to receive a loan to purchase a property. The mortgage defines the terms and conditions of how you will be provided with the loan and how you will pay the loan back. This will include things like, the interest rate (the amount the lender charges you for the loan), the fixed interest period (the length of time the lender will charge you this fixed interest), the repayment schedule (the amount you pay back annually).

In Germany, almost all mortgages are annuity mortgages, this means that for a specific period of the loan duration you fix the interest rate, for 5, 10, 15, 20 or 30 years. You agree on the interest rate and repayment rate with the bank. Over time, you pay both interest (for borrowing the loan) and you repay the loan. At the end of your fixed interest period you will refinance the remaining loan at a new interest rate depending on the market. There are thousands of different combinations you can choose from and we’re specialized in finding the right product for you.

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