With hundreds of customers already financed in Germany, Hypofriend is one of the leading mortgage brokers in Germany. You can see hundreds of 5-star reviews here.

Here’s why we’re different from your typical German mortgage broker.

Is now a good time to buy a house in Germany?

As your very first step, you will want to consider whether it makes sense to buy or whether it is better to just rent. Mortgage interest rates in Germany are currently stable, at a rate around 3.5-4% (see the current interest rates in Germany here). But you always want to check all the numbers. For example: transaction costs are very high in Germany, so you will want to check how long it takes before you make up these costs.

Hypofriend has a simple tool that calculates to check whether renting or buying makes sense for you and how long you need to own the property for it to break even for you. The tool shows you how your financial wealth and cash flow changes over time, depending on whether you own a home or not: Decide between buying or renting.

Can you afford a German mortgage?

What mortgage can you afford in Germany? Before you start your property search, you will want to answer this question and understand how much of a mortgage you want to get. To get started, you can use Hypofriend’s affordability mortgage calculator. In Germany, as most countries, the two key factors for your mortgage affordability are your disposable net income and your savings:

• Your disposable income is calculated by taking your monthly net income and deducting all recurring fixed costs, like insurance, rent etc. For average incomes, a general rule of thumb is that your mortgage monthly payments cannot exceed 40% of your net income. For higher incomes the ratio maybe somewhat higher, for lower incomes somewhat smaller. For self-employed it will be lower as many banks tend to assume high insurance costs, and hence banks often require a minimum net monthly income of about 2,000 Euros.

• Your total savings are relevant because this is what you will use as a down payment towards your mortgage. You must ensure that you at least cover all purchase fees (real estate commission + property tax + notary fees). This can be as little as 5% and as high as 15% depending on where you buy the property and who you buy it from. You can find an overview of the purchase fees in Germany here. Often times, newly built projects are bought directly from the project developer, hence saving you up to 3,57% in real estate commission. Therefore if you do not have much savings compared to your income you will want to consider purchasing a new home or another one with low or zero real estate commissions. If you don’t have savings, you may still be eligible or you can see how to afford more.

How to qualify for a German mortgage?

To be able to qualify for a German mortgage you will have to satisfy all of the lending criteria from the mortgage lenders. Unfortunately, each lender has its own set of criteria which makes qualification a difficult process. The main lenders in Germany are ING, Sparkasse, Commerzbank and Deutsche Bank.

General guidelines to qualify for a mortgage include being able to provide the following:

You can sign up to Hypofriend to create your digital self-disclosure form and upload your documents into our secure document upload section.

After finding a home, finding the right mortgage product is surely the most difficult. Fortunately, Hypofriend can help you here too with concrete advice. Our proprietary optimal mortgage recommendation engine will ask you a number of simple questions and will see where you qualify and recommend which mortgage product is best for you.
The three most important questions for your German Mortgage are:

• How long should I fix the interest rate?

• How quickly should I pay off my mortgage?

• How much should I initially pay down?

How to choose the right German mortgage?

There are several factors that play a key role in determining what is the right product for you and to understand how mortgages work in Germany. These include:

Likely departure

Your expected stay plays a critical role in determining the length of your fixed interest period. Lock in too short and you may face a high loan balance with rising interest rates. Leave earlier than expected and you may have to pay the bank the lost interest payments back.

Income and income growth

Understanding your income and how much your income might grow is key to understanding your repayment capacity.

Age

Your age and especially your retirement age are relevant, as this will have an impact on your disposable income in the future.

Willingness to rent

If you are willing to rent your property if you leave unexpectedly early, there is a higher security for you to take on more risk.

Investment alternatives

If your alternative investments yield a high return for you, there is no point in repaying your mortgage quickly.
To understand how our engine calculates your optimal mortgage you can read the FAQ.
Getting the mortgage decision wrong can be very costly — it can easily cost you a quarter of your home over a 30 year period. For example, paying off too quickly in a low interest rate environment, or too slowly when your income growth is modest and you cannot afford the risk of an interest jump when you refinance. These are complex problems that require advanced calculations and interest prediction models to guide you.

To find an indication of the right mortgage for your situation click on "See my options" below, it will take you through a set of basic questions and at the end, you’ll get an initial mortgage recommendation and offer personalized to your situation.

Can foreigners get a mortgage in Germany?

Another important point is your current residency status. The good news and short answer to this question is: It is possible to get approved for a German mortgage as a non-EU citizen living in Germany with a temporary residence permit. But you will encounter several limiting factors that have an impact on your maximum loan amount. The number of banks you can qualify will also be limited. Hypofriend advisors support on this topic constantly. Learn more in our detailed blog article Can I get a mortgage with a temporary residence permit?

8 factors that determine the right German mortgage lender

After you have found the right mortgage product — we will help you find the mortgage lender that offers this product at the lowest price. Hypofriend is integrated with every major mortgage lender which includes all major banks as well as smaller, regional Sparkassen, which amounts to over 750 partner banks in total.

There are a number of different features that we track in order to fine-tune your search and match you with the best lender:

Regional pricing discounts

Some lenders will offer regional discounts of 20 basis points, as a German mortgage broker we are notified and can match you to the right lender.

Property valuation

Some lenders may offer a higher property valuation. A higher property value will imply a more favourable Loan-To-Value (LTV) and in turn a better interest rate.

Commitment fee free period

Commitment fee free periods are important for buyers who are looking to buy new properties, some lenders offer this feature at more favourable terms.

Fixed interest period

Not all lenders are competitive across all products, so it makes sense to find the lender who is most competitive for your given fixed interest period.

Flexibility of repayment

If repayment flexibility is something you want to build into your mortgage, some lenders offer this at more favourable terms while others may charge you excessively.

Prepayment penalties

Cancelling or selling your property before your mortgage contract ends will result in prepayment penalties, if this is a possible outcome, we will match you with a lender with more favourable terms.

Modernization costs

If you want to add the modernization costs into the mortgage, it makes sense to find the lender that regards this as an investment into the property, as this will improve the LTV and in turn will give you a favorable rate.

Speed and/or specific lending criteria

The complexity of the process and the vast amount of individual requirements per bank make it essential that we pair you with the lender that is quick when there is pressure from the seller and time is of importance.