How to get a mortgage in Germany as a foreigner: US guide

As an American, you can buy property in Germany, but getting approved for a mortgage can be tricky. German lenders typically require foreigners to make larger down payments, often up to 40% of the property value.¹

They'll also scrutinize your financial stability more intensely when you're not a resident.

That said, getting a German mortgage as a foreigner is still possible. Here's everything you need to know about how to get a mortgage in Germany and what types of expenses you can expect.

We'll also introduce Wise — your international money transfer alternative. Use Wise to send stress-free transfers to over 140 countries - all at the standard mid-market exchange rate.

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Table of contents

Can US citizens get a mortgage in Germany? What are the legal requirements to get a mortgage in Germany as a non-resident? What types of mortgages are available in Germany? What are German mortgage rates? How much do you need for a down payment for a German mortgage? Buying property abroad? Send money the hassle-free way with Wise Things to consider before applying for a mortgage What documents are required to get a mortgage in Germany? How to apply for a mortgage in Germany: step by step How long does it take to get a mortgage approval in Germany? Do you need property insurance to get a mortgage in Germany? Tips to get approved for a mortgage in Germany Germany mortgage renewal

Can US citizens get a mortgage in Germany?

Yes, US citizens can buy property and get mortgages in Germany, but the exact process and requirements depend on your residency status. It's possible, but it's typically not easy.

If you already live in Germany with a residence permit and steady employment, banks will view your application more favorably. Non-residents generally face steeper requirements, including higher down payments and interest rates.

💡 Learn more about moving to Germany as an expat.

What are the legal requirements to get a mortgage in Germany as a non-resident?

German law doesn't explicitly prevent foreigners, including US citizens, from obtaining mortgages or set any specific legal requirements. Anyone is free to apply.

That said, mortgage lenders set their own requirements that can sometimes prevent you from qualifying.

For example, they may require you to work for a German company or earn your income in EUR. Or they might accept foreign income but only with a high down payment. It ultimately depends on your German bank.

If you're self-employed, you may need to provide more paperwork to prove your business stability and income consistency over several years.

Lenders view freelance or business income as less predictable than traditional employment, so it can be harder for self-employed workers to qualify for an overseas mortgage.

What types of mortgages are available in Germany?

Germany has a few different types of mortgages available, and they may be different from what you're used to in the US. Most Germans choose annuity mortgages, but interest-only mortgages, variable-rate mortgages, and even green mortgages are available as well.

So, how do mortgages work in Germany? Here's everything you need to know.

Annuity mortgage

This is the most common German mortgage. You pay the same amount every month, which covers both interest and loan repayment. At first, most of your payment goes toward interest. As time passes, more goes toward paying off the actual loan. In German, it's called Annuitätendarlehen.

Your monthly payment stays the same during your fixed-rate period (usually 10 years).² Unlike 30-year fixed mortgages in the US, German "fixed-rate" mortgages typically need to be refinanced after this initial period ends.

Interest-only mortgage

With Tilgungsaussetzungsdarlehen (interest-only mortgage), you only pay interest for a set time — usually 5 to 10 years.¹ Your monthly payments are lower because you're not paying off any of the actual loan amount.

When the interest-only period ends, you must either pay back the entire loan or refinance. This works well if you expect your property value to rise or your income to increase significantly. But it's risky if property values fall or if refinancing becomes harder.

Variable-rate mortgage

With Variabler Zinssatz (variable rate mortgage), the interest rate changes based on European Central Bank rates and market conditions. Your monthly payment can go up or down throughout your loan term.

The main benefit is that you often start with lower rates than fixed mortgages. The main downside is that your payments can increase if interest rates rise. This option makes sense if you plan to own the property for a short time or think rates will drop.

Forward loan

Forward-Darlehen, or a forward loan, lets you lock in today's interest rate for a future mortgage. This is useful when your current mortgage's fixed period is ending soon and you think interest rates will rise.

This option will give you protection against rate increases as you finish your current mortgage term.

Building society loan

A building society loan is a mortgage option that's unique to Germany. Called Bausparvertrag, it has two phases: saving and borrowing.

First, you save money monthly with a building society (Bausparkasse) until you reach a set amount. After reaching your target, you can borrow the rest at a guaranteed low rate.

Green mortgage

You may qualify for a green mortgage in Germany if you're buying or creating an energy-efficient home.

To qualify, your property must meet strict energy standards through either new construction or major renovations. You'll typically need a home with an energy level of A or B.²

What are German mortgage rates?

Mortgage rates in Germany change based on economic conditions. You can typically expect rates between 3.5% and 4.5%, depending on your financial situation and the type of mortgage you choose.³

How much do you need for a down payment for a German mortgage?

As an American, you should be prepared for a pretty high down payment. Most lenders will ask for at least 20% to 30% of the property value up front. In some cases, especially if you don't have strong ties to Germany, you may have to put down 40% or more.¹

For example, on a 400,000 EUR apartment, you might need between 80,000 EUR (20%) and 160,000 EUR (40%) as a down payment. This higher requirement helps banks reduce their risk when lending to foreign buyers who might be harder to pursue in case of payment issues.

Buying property abroad? Send money the hassle-free way with Wise

Now that we covered some of the basics, the only question left is how to send money to pay for your property overseas.

Wise offers you a quick, secure and transparent way of sending money to Germany. You get the mid-market exchange rate for your payments and see how much is charged for the transfer before sending the money from your bank.

With the Wise Account, you can also hold 40+ currencies, spend money in 150+ countries, and receive like a local in 8+ different currencies.

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Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up-to-date pricing and fee information

Things to consider before applying for a mortgage

Buying property abroad as an American isn't always straightforward. However, taking the time to educate and prepare yourself for what to expect from the process can improve your chances of getting approved by a mortgage lender.

Here's what to consider.

• Choose your mortgage provider carefully: You can work directly with German banks or hire a mortgage broker; brokers charge fees, but they can sometimes increase your chances of approval

• Understand credit requirements: German banks don't use the US FICO system but may check your SCHUFA score (German credit rating); sometimes you may be able to use your US credit report to demonstrate payment history, but it depends on the mortgage lender

• Save beyond the down payment: You'll need savings not just for the 20% to 40% down payment but also for closing costs, so start saving early and aggressively

• Research locations: Property prices can vary widely across Germany, and major cities like Munich and Frankfurt have much higher prices than smaller towns

💡 Learn more about buying property in Europe and the important things to consider.

Additional costs

Buying property in Germany comes with additional costs, including a real estate transfer tax, real estate agent fees, and notary costs. Here's what to expect.

Expense	Percentage of purchase price⁴
Real estate transfer tax	3.5% to 6.5%
Real estate agent's fee	3% to 7%
Notary and registration fees	1.5% to 2%

These additional costs can add 8% to 15% to your total purchase price, and you'll need to pay for them up front. They typically can't be financed.

What documents are required to get a mortgage in Germany?

Document requirements vary between lenders, but most will ask for at least the following:

• Valid passport or ID
• Proof of income (pay slips, tax returns, or bank statements)
• Credit history

If you're self-employed, you'll likely need to show more proof of your financial stability. You may need to submit business financials and tax assessments (Steuerbescheid) from German tax authorities.

How to apply for a mortgage in Germany: step by step

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1. Check your eligibility

Before starting the application process, make sure you meet the basic requirements. Americans can get German mortgages, but you'll need proof of income, good credit history, and enough savings for the down payment.

2. Gather your documents

Collect all necessary paperwork before approaching lenders. This includes your passport, income statements, tax returns, bank statements, and other documents.

If you don't already have one, you should also open a bank account in Germany.

3. Apply for pre-approval

Get a mortgage pre-approval before house hunting. This way, you'll have a clear budget in mind as you look for your German home.

4. Find a property

Look at properties within your budget. It's often a good idea to work with a German real estate agent, especially if they have experience with foreign buyers.

5. Make a formal mortgage application

Once you've found a property, submit your full mortgage application. Your bank will take some time to review it. They may also reach out for additional information if something is missing from your application.

6. Review and sign the mortgage offer

If approved, you'll receive a mortgage offer outlining the loan amount, interest rate, term, and conditions. Review this carefully and sign if everything looks good to you.

How long does it take to get a mortgage approval in Germany?

It depends. Typically, you should hear back from your mortgage lender within 2 weeks. However, sometimes the process can take longer.⁵

Do you need property insurance to get a mortgage in Germany?

Typically, yes. Most German mortgage lenders require some form of insurance to protect their investment, but the specifics ultimately depend on the property type and your circumstances.

For houses, building insurance (Gebäudeversicherung) is almost always mandatory. This covers structural damage from events like fires, storms, or water damage. Lenders want to make sure that if something happens to the property, there's money to repair or rebuild it.

If you're buying an apartment, you typically won't need separate building insurance. The building itself should already be covered through the homeowners' association policy. You'll pay for that through your monthly maintenance fees.

You typically won't be required to get contents insurance (Hausratversicherung). That said, you can get it if you want to.

Mortgage lenders may also need you to take out a protection insurance policy (Risikolebensversicherung), especially if you're the only person earning income in your household.

Tips to get approved for a mortgage in Germany

It's not easy for a foreigner to get approved for a mortgage in Germany, but here are a few things you can do to maximize your chances.

• Save a large down payment: Offering 30 or 40% makes you a much safer bet for German lenders and may lead to a better interest rate, too

• Show stability in your finances: Maintain steady employment and avoid major financial changes in the months before applying

• Work with a mortgage broker who specializes in helping foreigners: They can potentially connect you with lenders who are more open to American applicants

If you don't get approved for a mortgage in Germany, you can explore other options. For example, consider working with an international mortgage lender.

Germany mortgage renewal

German mortgages typically have shorter fixed-interest periods, so you'll need to renew your mortgage when that period ends. This process is called *Umschuldung, *and it allows you to switch to a new mortgage either with your current bank or a different lender.

After 10 years, you can refinance your mortgage without paying any penalties. If you want to refinance earlier, you'll have to pay early repayment charges (Vorfälligkeitsentschädigung), which can be quite high.²

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Getting a mortgage in Germany as an American isn't simple, but it's possible to get approved if you're financially stable and can pay a large down payment, usually between 20% and 40%.¹

Sometimes, you may need to pay even more than that.

Starting the process early and working with a specialized broker is often helpful. With patience and persistence, you can successfully finance your German home.

If you regularly need to send money between the US and Germany, use Wise. It’s fast, simple, and secure, even for large amounts like your down payment. Plus, there are no foreign exchange rate markups.

Sources

1. Kredium - Getting a Mortgage in Germany as a Foreigner
2. Expatica - Getting a mortgage in Germany
3. I Am Expat - Mortgages in Germany
4. Property Tax International - Complete guide to buying property in Germany as a non-resident
5. Hypofriend - How quickly can I get approved?

Sources checked 05/15/2025