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How to obtain a loan for your property in Germany

German financial institutions are currently being very cautious and it is exceedingly difficult to get a mortgage. Author's comment: The adage "the only way to convince the bank to give you a loan is to prove you don't need one" describes the situation perfectly.

In order to qualify for a housing loan, you must have at least 20%-30% of the total sale price of the property. If you have less than 20% it's very unlikely that the bank will give you a loan. They just aren't prepared to take the risk!

If you are fortunate enough for the bank to accept your plea for a mortgage, the normal repayment,"Tilgung", per year is 1%-3% of the amount outstanding on the mortgage (borrowed amount plus interest). As you owe the bank less money, the repayments remain the same but as a percentage the Tilgung increases. The term "Laufzeiten" of the mortgage can be up to 35 years, depending of course on the amount you borrow and how much you pay off.

Banks are unwilling to commit themselves to a fixed interest rate, "Zinssatz", for very long, the longest period you will get is currently 2-4 years. Of course, the longer period of time you try to fix the interest rate for, the higher the interest will be.

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