Mortgages in Germany: how to read and compare offers

In brief

Warning! Borrowing money costs money. A mortgage (Baufinanzierung) often runs for decades; the rate must remain affordable even if your income fluctuates.

It is usually an annuity loan (Annuitätendarlehen): the instalment stays the same, the interest share falls and the repayment share rises. The interest is often fixed for 5, 10 or 15 years (1). Small differences in interest cost a lot: in BaFin’s example (300,000 euros, instalment 1,575 euros) 3.14% effective costs about 113,500 euros in interest and fees, 3.35% about 125,500 euros (1).

This page explains terms and steps. We do not advise whether or how to finance a property; the decision is yours.

Request offers

We do not broker loans. The intermediary is the provider named in the form. The form is in German; the terms in the tables will help you fill it in. The Verbraucherzentralen offer independent advice (3).

Purchase costs

What to prepare

What to look at

• Effective annual rate (effektiver Jahreszins). Besides the borrowing rate it includes all costs of the loan; commitment interest (Bereitstellungszinsen) is not included (1).
• Repayment. At around 3% interest, repaying with 1% initial repayment takes 46 years, with 3% just over 23 years. The loan should be paid off by retirement at the latest (2).
• Instalment. Many banks advise that the instalment should not exceed 40% of net income; about 10% should be left as a buffer (2).
• Commitment interest. It is usually charged after 3 to 12 months if the loan has not yet been drawn (3).
• Special repayments (Sondertilgung). Annual special repayments of 5 to 10% of the loan amount can often be agreed free of charge if you ask (3).

Steps

1. Work out your budget: own funds, purchase costs and an affordable monthly instalment (2).
2. Request offers using the form above. You enter the details yourself.
3. Compare offers by the effective annual rate, for the same amount, fixed-interest period and repayment (1).
4. Read the information sheet the lender must give you before signing: borrowing rate, effective rate, instalment and a sample repayment plan (1).
5. Negotiate special repayments and the period free of commitment interest (3).
6. Keep the contract, information sheet and repayment plan.

Your rights in brief

• You can in principle withdraw from a consumer credit agreement within 14 days (4).
• If the interest is fixed for more than 10 years, you can terminate after 10 years with 6 months’ notice; with a variable rate the notice period is 3 months (1).
• The bank may only demand early repayment compensation (Vorfälligkeitsentschädigung) if early repayment causes it a loss (3).

Please note

This page provides general information and points to a request form. We do not advise, do not broker loans and do not recommend any specific bank. You fill in the form yourself and conclude the contract directly with the lender. We may receive a commission for a request made via the form.

Sources (checked 11 October 2026, in German)

1. BaFin – Immobilienkredit
2. Verbraucherzentrale – Immobilienfinanzierung: So berechnen Sie, was Sie sich leisten können (as of 6 Nov 2024)
3. Verbraucherzentrale – Immobilienfinanzierung: Häufige Fragen rund um Hauskauf und Hauskredit (as of 14 Nov 2025)
4. Verbraucherzentrale – Kreditverträge: Diese Rechte haben Sie als Kreditnehmer (as of 19 Mar 2025)