Buying a House in Germany | What we Learned as Expats & Answering the BIG Questions

How to buy a house in Germany as an expat, our firsthand experience and answering all of your questions. From how much house can I afford in Germany to how to get a loan for a home in Germany as a foreigner, we dig deep into what we have learned from doing it ourselves.

Episode 7 | #livingingermany and #homebuyingingermany in the​ Black Forest, Germany | Filmed July 23, 2021

GEAR IN THIS VIDEO:

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🛵 Our 101 TOP TRAVEL TIPS:

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Originally from the Midwest of the USA, we moved to the #blackforest in 2013 and quickly embraced #expatlife. As American expats living in #Germany, things weren't always easy, but we've grown to love our life in Germany. We started this #travelvlog​ to share our experiences with friends and family, and to help those who are interested in moving overseas! Whether you are interested in moving abroad, working abroad, studying abroad, raising a family abroad, or just want to #traveleurope, we're here to give you a first person look at what lies ahead. 😊🎥🌎

DISCLOSURE: This description contains an affiliate link. This means that, at no cost to you, the Black Forest Family may earn a commission if you click through to make a purchase. To learn more, please read our disclosure on our website for more information.

[wora]

Listening to the Notary: It is the same for a German. When I bought my house I was surprised how fast he could read. But one of the tasks of a Notar is to make certain both sides understand the document. That is why he tested your B1, I guess. So both sides can trust him, since he is not only requested by you to make sure everything is ok but also by the state.

[verlorenerjunge]

all the best. buying a house these days is insane. especially in southern germany. you're in one of the best locations <3

[bigernie]

Congrats on signing your contract !
My two cents: The saying goes that buying a house is the last adventure standing available in Germany. Be careful when to pay which bill in the construction process coming up. Quite a few buyers like you have been deceived when their construction company went bust before the house was finished while having paid for way more than had actually been put on the ground.
Relating to the contract language, rest assured that >99 % of Germans do not fully understand the ramifications of what is written in house purchase contracts as it is mostly legalspeak.
Unlike in some other countries, German banks are legally required to make sure you can afford the monthly mortgage payments (including paying down the principal) based on your current income situation.
The good news for Americans (and Canadians) is that German property taxes are only a fraction of typical North American rates.

[Francesco_M.]

Top information you've been sharing with us, so much appreciated guys! I discovered this channel just recently so I started from the very beginning and I intend to watch all of your videos until recent days.
All the best wishes from the southwest of Italy ! 🇮🇹 🌞

[peterkesseler]

Gratulation zum Hauskauf! Schön das Ihr Euch entschieden habt hier seßhaft zu werden. Der Schwarzwald ist wirklich schön! Viele Grüße aus dem Westerwald (Rheinland-Pfalz)

[mikebag]

Congratulations on your own house!

4:40: 120 times your monthly income?.... Wow! Imho that sounds pretty high.
In my case (20 years ago): The rule of thumb for buying a house/apartment was (70km to the south from your location :-)):

1) You must be able to repay your full mortgage incl. interest within 30 years. Meaning: Up to retirement age. Because when your're retired, you don't have your full income. You get a pension which is much lower than your salary. Normally, its hard to get a mortgage when you finish repayment a) when you're retired and b) your are 89 years old :-)
2) The equity lowers the amount of money you have to lend. And this amount of money you must be able to repay within 30 years incl. interest rate. Is your income high enough, you don't need equity. Meaning: You can effort the mortgage incl. interest without problems.
3) You have to pay back (amortization) at least 1% per year plus the annually interest.

To calculate the monthly mortgage: If you house costs e.g. 650k (a bargain here in the south) and the interest rate is 1% you have to pay 1% amortization + 1% interest of 650k = 13.000 Euro a year = 1.100 Euro a month. But this is, like mentioned above, only half of the story! You have to repay the full amount until you retire. So you mortgage incl. interest will be nearly 26.000 Euro a year, meaning 2.200 Euro/month for a 650k house.

If 2.200 Euro is a third of your monthly income (another rule of thumb: "Die 30-Prozent Mietregel": Don't spend more than 30% of you net income for rent or mortgage), you should have at least 7.000 Euro/month after taxes. So, 10-12.000 Euro gross income/month. If your account advisor said their rule is that you can effort 120 times your monthly income: Based on the net income of 7000 Euro: This would be about 840.000 Euro without equity? I have my doubts... Ok, except you have 200.000 Euro equity. And you are not older than 35 :-) (is this possible? Making a master degree and maybe a PhD? And you had enough time for saving 200k on the side? - And earning 10-12.000 Euro at the beginning of your work life? :-)).

Where is my mistake in my calculation/thoughts?

Anyway, what ever you do: Don't calculate to spend more than 30% of your monthly net income. Imho, you will not get a mortgage from a bank if the amount is higher. Ok, if you say your house is your personal "pension found" or a replacement for a/an additional classic German life insurance: In this case maybe 35% could be okay as well (depending on the bank - maybe the interest rate will be a little bit higher) - but this will be the upper limit a reputable bank will accept.

Because you are living the the Black Forst: I will write my next comment in Alemannic :-)

[burkanov]

Hey, most sincere congratulations! Have a happy and joyful life in your new home!

[olafborkner]

Congratulations on your new home. I wish you have only happy times and lots of joy.

[ulihanel]

Simply put..All the Best to you guys. Welcome to Germany. I am a German in who lived 30+ years in the US..

[HH-hdnd]

Prices of houses will differ greatly depending on where you live. In general cities are more expensive than rural areas and the South and the West of Germany are more expensive than the North (except Hamburg) and the East (except Berlin).

[Rami-Jarrah]

Thank you for all the info, I'm planning on buying a house in Germany in the region around the black forest and was wondering whether or not you had to scout out the plot to build on yourself or if it came to you as a package with the actual house build, and was it a prefabricated house?

[justtube]

That story about notary was hilarious 😂
It must have been an example of the world famous humor they have in Germany.

[Rick]

My Tip, hire a independend Architekt to supervise the house project for your side.

[jingshenghong]

Congrats on your new home acquisition! I am new to your channel, just subscribed. I and my wife have been living in Latvia for over 7 years already (both of us are permanent residents) and we decided to buy a piece of land right on the edge of the local pine forest near Riga (the capital city) 2 years ago and then our painful house building process started but its definately worth it though cuz we designed our own dream house from A-Z. We spent around 15000 EUR just on doing the pre-stages (paperwork) such as transforming forest land to residential land, drawing up the sewage and water pipes etc. As for now, all the external work is about to be finished, facade, roof, and so on. I know its still a very beginning of our long house building journey but I think it will be a memorable experience for us. You guys also went through this right? Or you purchased a half-built house?

[christiankastorf]

By law banks are not allowed to ruin you by giving you a credit that is far too "generous". In detail. They want to see how much income you have. Then they substract your inevitable monthly costs like rent (important if you have your own house to be built and still need a flat), insurances, other monthly rates that you have to pay. Step two is a calcalation about living-costs. Even if you swear that you will be living on the cheapest food, walk in rags, don't have any luxuries, never spend anything at all, they are not allowed to give in. And that means that the monthly mortgage rate that you are able to pay is a thing that is within legal limits. Rule-of-thumb formula for paying back a mortage. Let us say you borrow 100, 000 € for 5% interest and you can pay back 750€ per month that will roughly mean that you pay back around 9, 000€ per year. 100, 000 x 1, 05 -9, 000 = 96, 000. All the money that you pay for the mortgage minus the interest rates is the "Tilgung", from "tilgen", to pay off. That means that you pay back 4% of that loan within the first (!) year in our example and that amount is what is laid down in your contract, even though the money (percentage) that is used to pay off the loan and does not go into the interest rates grows from year to year. In year two the calculation is then 96, 000 x 1.05 - 9000 = 91, 800. For the third year is it 91, 800 x 1.05 - 9000 = 87, 390 and so on. In reality paying off works a bit quicker than in my rough scheme because you pay back from month to month and not once a year. But to understand who it works, my rough formula is okay. I asked a banker once whether it was alright if I used it for my kids in school when I did social sciences with 9 graders. We had a time in Germany when people had to agree to a "Tilgung" rate that was as low as 1% or 1.5% due to high interest rates and inflation. A couple of years ago interest rates were extremly low and people were happy aout a higher amount that went into "Tilgung" but the tide has turned. No wonder that people buy or build a house for a lifetime and are not as willing to move as in the USA.

[wora]

Deposit: The bank will evaluate the probability of you paying your dues and the value of your property in case you default. Usually they will take the price of the house reduce it by safety margin and then look whether you are "worth" the loan you want. The bigger the difference between "safe value" of your house and the loan you need, the "better" you are as a customer. Which will reduce the loan rate ("Zinssatz") you will have to pay.

[leonhardwinschen]

I really enjoy your videos. Keep em coming. All the best

[marlajacques]

Congratulations! Very exciting. One I plan to do the same for a turn key holiday apt but don’t think I’d even rent it out bc the income taxes from that (I’m Canadian) were too steep to cover costs

[LpTroop]

Black forest <3 Especially the southern part is one of the most beautiful regions in Germany :-)

[jjinwien]

Translator = for written language; interpreter = for spoken language