Real estate financing in Germany: costs and equity requirements

Real estate financing in Germany: costs and equity requirements

The dream of owning your own home is an important life goal for many people in Germany. A house or apartment where each family member has their own space where they can spend time together and maybe even a garden or balcony – that sounds tempting. But realizing this dream requires significant financial preparation. According to data from the analysis company Bulwiengesa, the average price for a terraced house in Germany is around 552,000 euros. These costs vary significantly depending on location, with cities tending to be more expensive than rural areas. In order to finance the purchase, it is recommended to save at least 20 percent of the purchase price as equity, which in this case corresponds to 110,000 euros.

In addition to the pure purchase costs, the additional purchase costs must also be taken into account. These include notary and land registry costs as well as the real estate transfer tax, which varies between 3.5 and 6.5 percent depending on the federal state. In the example given, these additional costs amount to around 43,000 euros, not including brokerage costs. In total, potential buyers should therefore raise at least 153,000 euros before they can ask a bank for financing help. It is important to remember that property prices fluctuate and future developments are difficult to predict, which is why sound financial planning and discipline are essential to realizing the dream of home ownership.