Are you facing the challenge of finding the right financing for your property? Professional financial advice can help you save thousands of euros. Discover how to effectively compare mortgages and loans and avoid pitfalls.
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The topic briefly and concisely
An independent financing consultation can save thousands of euros in interest costs by comparing over 500 providers.
In addition to the interest rate, special repayment options, the possibility of changing the repayment rate, and a long period without provision interest are important criteria when comparing loans.
The incidental costs when buying property (land transfer tax, notary, agent) can amount to 10-15% of the purchase price and should be covered with equity.
Deciding on property financing is often one of the most significant financial decisions in life. Given fluctuating interest rates and a plethora of options, sound financial advice is essential. This article shows you how to minimize your financial burden and solidly finance your dream property through focused loan comparison and the right mortgage strategy. We explore current interest conditions, the advantages of independent advice, and how to optimally plan for additional costs.
Understanding the current interest landscape for mortgages in Germany
The interest rates for mortgage loans in Germany are relatively stable in June 2025 but are at a higher level than in the low-interest phases of recent years. Currently, mortgage rates for ten-year loans are around 3.5%. For shorter fixed-rate periods, such as 5 years, slightly more favourable interest rates of about 3.3% to 3.4% can often be found. Longer fixed-rate periods of 15 or 20 years tend to be more expensive, with average rates around 3.7% to 3.8%. The European Central Bank (ECB) recently lowered its key interest rate to 2.00% in June 2025, which could potentially have a dampening effect on mortgage rates. Nevertheless, experts expect rising interest rates towards 4% for 10-year loans in the long term. Therefore, a thorough comparison of property financing is more important than ever. Choosing the right fixed-rate period and optimising one's creditworthiness can significantly improve the individual interest rate. The current interest rate developments highlight the necessity of careful planning and consultation.
Take advantage of independent financial advice
An independent financial advisory service offers you significant advantages compared to visiting your own bank, which usually only offers its in-house products. Independent advisors can access a network of often over 500 banks, savings banks, insurance companies, and building societies. This provides a comprehensive market overview and access to significantly better terms – often saving you several thousand euros in interest costs. An independent advisor analyses your entire financial situation and finds a tailored solution without conflicts of interest. Many brokers receive preferential interest rates from banks because these banks save on their own sales and advisory costs. The advisory service is usually free for you, as the advisor receives a commission from the financing bank. Another advantage is the time saved and the assistance with compiling all necessary documents. Make use of the expertise for your optimal financial advisory service. This way, you not only secure top conditions but also a financing structure that suits your needs in the long term.
Loan comparison: More than just the interest rate matters
When comparing loans for your property financing, you should not only focus on the nominal interest rate or the effective interest rate. Many other factors determine whether an offer is truly affordable and suitable for you. A good construction loan considers your monthly budget and offers flexibility. Pay attention to the following aspects:
Options for special repayments: Free special repayments allow you to become debt-free faster if unexpected funds become available. Up to 5% of the loan amount is often possible.
Repayment rate adjustment: The ability to adjust the repayment rate during the term provides flexibility in changing financial circumstances. Often, 2-3 changes are free of charge.
Provision interest: These are incurred if you do not immediately draw down the loan. The longer the interest-free provision period (e.g., 12 months), the more costs you can save.
Fixed interest rate: A long interest rate lock-in of 15 or 20 years offers planning security but is often associated with an interest surcharge. Weigh security against costs.
Total costs: A financing calculator helps you get an overview of all cost factors.
A thorough comparison of over 400 providers can help you find the best offer tailored to your needs. Comprehensive advice covers these points and helps to avoid hidden costs. Choosing the right financing partner is crucial for worry-free financing.
Accurately calculate additional costs in property financing
In addition to the pure purchase price of the property, various incidental costs arise, which can often amount to 10% to 15% of the purchase price. Ideally, this sum should be covered by equity. The most important incidental costs include:
Property transfer tax: This varies between 3.5% and 6.5% of the purchase price, depending on the federal state.
Notary and land registry fees: Around 1.5% to 2.0% of the purchase price is incurred for notarisation and land registry entry.
Broker's commission: If an estate agent is involved, up to 3.57% of the purchase price (including VAT) may be charged to the buyer, depending on regional regulations and agreements.
Financing incidental costs: These can amount to about 2-3% of the financing sum and include, for example, costs for registering the land charge (around 1.2-1.5% of the loan sum).
Do not underestimate these costs, as they have a significant impact on your overall budget. A precise listing and early consideration of these items in your financial planning is essential. Learn more about the different sources of financing. Thorough planning protects against nasty surprises.
Effectively integrate funding and government grants
Various government subsidies are available in Germany for building or purchasing residential property, which can significantly reduce your financial burden. The Kreditanstalt für Wiederaufbau (KfW) is a key contact here, offering various programs with low-interest loans and grants. For instance, the 'KfW Home Ownership Program (124)' supports the construction or acquisition of owner-occupied housing with up to 100,000 euros. For energy-efficient new buildings, there are programs such as 'Climate-Friendly New Building - Residential Buildings (297, 298)' offering loans up to 150,000 euros. Families with children can benefit from the 'Home Ownership for Families (300)' program, which provides loans up to 270,000 euros depending on the number of children and income. Incorporating KfW funds can often reduce interest costs by several thousand euros. In addition to KfW, the Federal Office for Economic Affairs and Export Control (BAFA) offers grants, particularly for energy-efficient renovation measures. Federal states and municipalities often have their own subsidy programs as well. Professional financial advice will help you identify and optimally combine the right sources of funding. Applications are typically made through your bank. This way, you secure valuable financial advantages.
Long-term planning: Keep refinancing and flexibility in mind
Real estate financing is a long-term project often spanning 20 to 30 years. Therefore, it's important to consider not just the current conditions, but also the period after the initial fixed interest rate expires. In most cases, after 10 or 15 years, a residual debt remains, for which follow-up financing is required. Here are various options:
Prolongation: You continue financing with your current bank, albeit under newly negotiated terms.
Debt Rescheduling: You switch to another bank that may offer you more favourable interest rates for the residual debt. A switch may be worthwhile if the new interest rate is at least 0.2 percentage points lower.
Forward Loan: This allows you to secure current interest rates for follow-up financing up to 60 months (5 years) before the fixed interest period expires. This is sensible if you expect rising interest rates.
Early planning of follow-up financing, around 3 to 5 years before the end of the interest period, can secure substantial interest advantages for you. Also, look for flexibility in the loan agreement, such as free special repayments or the option to adjust the repayment rate. This helps you respond to changing life circumstances. Good financial planning takes these aspects into account from the outset, ensuring you remain financially capable in the long term.
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The path to owning your own property becomes significantly easier and more cost-effective with careful financial planning and competent advice. Independent financial consultancy provides you with access to a wide range of offers and helps you find the best terms for your mortgage and loan. Comparing interest rates, additional costs, funding opportunities, and flexible contract conditions is crucial. With a strategic approach and professional support, you can optimise your financial burden and save thousands of euros. Remember that early and comprehensive advice, such as that offered by Auctoa with data-driven analyses and the ImmoGPT-Chat, helps you make informed decisions and avoid hidden costs. This way, your dream of home ownership is built on a solid financial foundation.
Additional useful links
Bundesfinanzministerium provides detailed information on housing financing in Germany.
The Deutsche Bundesbank offers comprehensive interest rate statistics for money and capital markets.
Wikipedia offers an informative overview of the mortgage concept in Germany.
The BVR (Bundesverband der Deutschen Volksbanken und Raiffeisenbanken) publishes relevant publications and analyses on the credit market.
FAQ
How do I find the best financial advice?
Look for independent financial advisors who can access a wide network of banks. Pay attention to transparent processes and advice that takes your individual situation into account. Recommendations and testimonials can also be helpful. For example, Auctoa offers you data-driven analyses and innovative tools like the ImmoGPT chat.
Can I get a mortgage without equity?
A financing option without any equity (full financing or 110% financing) is rare and tied to strict conditions, such as excellent creditworthiness and a very secure, high income. Most banks expect at least the ancillary purchase costs (approximately 10-15% of the purchase price) to be covered by own funds.
How long should the interest rate fixation of my mortgage be?
The optimal duration of the interest rate lock depends on your risk appetite and the current interest rate environment. During periods of low interest rates, a long-term fixed rate (15-20 years) can be advantageous to secure favourable conditions over the long term. In times of higher interest rates or expected rate cuts, a shorter lock-in period (5-10 years) may offer more flexibility. Seeking advice can help determine the right strategy.
What is a forward loan and when is it useful?
A forward loan allows you to secure the interest rates for your follow-up financing up to 5 years before your current fixed interest period expires. This is particularly useful if you expect interest rates to rise and wish to lock in the current conditions for the future.
What role does the Schufa play in mortgage lending?
The Schufa report is an important factor for banks when assessing your creditworthiness. A positive Schufa score increases your chances of receiving a loan approval and can lead to better interest conditions. Negative entries can make financing more difficult or expensive.
How can I use government subsidies for my property financing?
Learn about KfW Bank programmes (e.g. for energy-efficient construction or family support) and those from BAFA. Federal states and municipalities often offer funding as well. A financial advisor can assist you in finding suitable programmes and submitting applications correctly. Applications are usually made through your financing bank.
