What’s the difference between buying for own use and buy to let?

In Germany, there is a clear differentiation between mortgages for own-use (Eigennutz) or buy-to-let mortgages (vermietet). If you’re looking to buy a property to rent it out, you will face different requirements than if you’re buying for own-use.

Differences between an own-use mortgage and buy-to-let mortgage in Germany:

  1. Interest rates are higher on buy-to-let mortgages because banks have stricter (and more expensive) capital requirements for investment properties

  2. The minimum deposit is typically higher than for buy-to-let mortgages in Germany

  3. You will have to provide proof of the rental income as it will be included in your household budget or disposable income calculation

  4. For foreign investors, the maximum loan amount is typically calculated using a formula multiplying the cold rent with a multiplier of 120

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