Understanding German mortgage terms and costs
German home financing revolves around the fixed-interest period, the repayment rate and sizeable closing costs. The table summarizes the main items verified against BaFin guidance and German transfer-tax rules.
| Term / cost | How it works in Germany |
|---|---|
| Sollzinsbindung | Fixed-interest period during which the rate is locked; commonly 5, 10, 15 or 20 years |
| Tilgung | Initial annual repayment rate chosen by the borrower (e.g. 2%–3%); higher Tilgung repays faster |
| Restschuld | Remaining balance after the fixed period, refinanced via a follow-on loan (Anschlussfinanzierung) |
| Grunderwerbsteuer | One-off property transfer tax set by each federal state (Land), ranging 3.5%–6.5% |
| Notary & land registry | Notarization and Grundbuch registration fees, paid from equity, not financed by the loan |
- The Grunderwerbsteuer (property transfer tax) is set by each federal state (Bundesland) and ranges from 3.5% to 6.5% of the purchase price as verified in 2025 (for example 3.5% in Bavaria and Saxony, up to 6.5% in North Rhine-Westphalia, Brandenburg, Saarland and Schleswig-Holstein). Confirm the current rate for the specific Land.
- German mortgages fix the rate only for the Sollzinsbindung. When it ends a Restschuld typically remains and must be refinanced at whatever rate applies then, so the long-run cost depends on future refinancing.
- Notary fees and land-registry (Grundbuch) fees are additional closing costs, and together with the transfer tax generally cannot be financed by the mortgage; they are paid from equity.
- This calculator assumes a single rate over the modeled period. It does not separately simulate a chosen Tilgung, the Restschuld or follow-on financing.
What is a German mortgage calculator?
A German mortgage calculator models the standard home loan type, the annuity loan (Annuitätendarlehen), where a constant monthly payment (Annuität) combines interest (Zinsen) and principal repayment (Tilgung). As the balance falls, the interest portion shrinks and the repayment portion grows, while the total payment stays the same — the same amortization mathematics used internationally.
The calculator derives the loan from the purchase price minus the buyer's equity (Eigenkapital). German lenders generally expect the buyer to fund the purchase-related costs, and often part of the price, from equity; a larger equity contribution typically secures a lower interest rate. Closing costs such as the property transfer tax and notary fees cannot usually be financed by the mortgage.
A defining feature of German mortgages is the fixed-interest period, the Sollzinsbindung, commonly 5, 10, 15 or 20 years, during which the rate cannot change. The borrower also selects an initial annual repayment rate (Tilgung), for example 2% or 3% of the loan. Because the fixed period is usually shorter than full repayment, a remaining balance (Restschuld) stays at the end and must be refinanced (Anschlussfinanzierung). This calculator assumes one rate for the whole period for comparison.
How to use this German mortgage calculator
- Enter the purchase price and your equity contribution in euros. The calculator derives the loan as price minus equity.
- Enter the annual interest rate agreed for the fixed-interest period (Sollzinsbindung).
- Enter the repayment period in years. To model the standard German annuity loan, use the period over which the loan would fully repay at your chosen rate and Tilgung.
- Read the monthly payment (Annuität), the total paid and the total interest for the entered assumptions.
- Budget separately for the property transfer tax (Grunderwerbsteuer), notary fees and land-registry (Grundbuch) fees, which are paid from equity.
The annuity loan formula
The constant monthly payment M (the Annuität) is derived from the present-value annuity formula, setting the present value of all future payments equal to the loan principal P. The monthly rate r is the annual rate divided by 12; n is the number of monthly payments over the modeled repayment period (years times 12). In German practice the borrower sets the initial Tilgung, which together with the interest rate determines how quickly the loan repays and what Restschuld remains when the Sollzinsbindung ends.
Common mistakes
- Assuming the fixed rate lasts until the loan is repaid; the Sollzinsbindung is usually shorter, leaving a Restschuld to refinance.
- Forgetting the Grunderwerbsteuer, notary and land-registry fees, which are paid from equity and not financed by the loan.
- Ignoring the chosen Tilgung; a low repayment rate leaves a much larger Restschuld at the end of the fixed period.
- Expecting the same transfer-tax rate everywhere — Grunderwerbsteuer differs by federal state, from 3.5% to 6.5%.
- Underestimating the equity needed, since German lenders often expect buyers to cover closing costs and part of the price themselves.
Domande frequenti
What is Sollzinsbindung?
Sollzinsbindung is the fixed-interest period of a German mortgage — the length of time for which the agreed interest rate is locked and cannot change. Common periods are 5, 10, 15 or 20 years, with many borrowers choosing between 10 and 20 years for payment certainty. Because the Sollzinsbindung is usually shorter than the time needed to repay the loan in full, a remaining balance (Restschuld) typically stays at the end and must be refinanced through a follow-on loan.
What is Tilgung in a German mortgage?
Tilgung is the principal repayment portion of a German mortgage payment, expressed as an initial annual repayment rate the borrower chooses when taking the loan — for example 2% or 3% of the loan amount per year. A higher Tilgung means the loan is repaid faster and less interest is paid overall, but the monthly payment is higher. Within the constant monthly annuity, the Tilgung share grows over time as the interest share falls.
What is Restschuld?
Restschuld is the remaining loan balance left over at the end of a German mortgage's fixed-interest period (Sollzinsbindung). Because the fixed period is usually shorter than the full repayment time, the loan is rarely paid off when the rate lock ends, so the outstanding Restschuld must be refinanced through a follow-on loan (Anschlussfinanzierung) at the interest rate available at that time. A higher initial Tilgung reduces the Restschuld that remains.
What is Grunderwerbsteuer and how much is it?
Grunderwerbsteuer is the one-off property transfer tax paid by the buyer when real estate changes hands in Germany. Each federal state (Bundesland) sets its own rate, ranging from 3.5% to 6.5% of the purchase price as verified in 2025 — for example 3.5% in Bavaria and Saxony and up to 6.5% in several other states. The tax is due after the notarized purchase and generally cannot be financed by the mortgage, so buyers pay it from their own equity.
What benchmark do German mortgage rates track?
German fixed mortgage rates are priced off longer-term capital-market rates — particularly Pfandbrief and swap rates for the relevant fixed period — rather than directly off the central bank's policy rate. The European Central Bank's main refinancing rate is the headline policy benchmark that influences the overall level of rates. Calculate.Studio shows the current ECB policy rate separately with its verification date rather than embedding a mortgage rate in this guidance.
How much equity do I need to buy in Germany?
German lenders generally expect buyers to fund the purchase-related closing costs — the property transfer tax, notary fees and land-registry fees — and often part of the purchase price from their own equity (Eigenkapital). A larger equity contribution lowers the loan-to-value ratio and typically secures a better interest rate. Because closing costs alone can add several percent of the price and cannot usually be financed, equity requirements in Germany are higher than the down payment alone suggests.
Fonti
- Federal Financial Supervisory Authority (BaFin). Property loans and real estate financing at a glance. bafin.de.
- German federal states (Länder) / Federal Ministry of Finance. Grunderwerbsteuer rates by Land. bundesfinanzministerium.de.
- European Central Bank (ECB). Key ECB interest rates and monetary policy. ecb.europa.eu.
- Deutsche Bundesbank. Mortgage and housing finance statistics. bundesbank.de.
- Germany Trade & Invest (GTAI). Taxation of real estate in Germany. gtai.de.