Guide · Property financing

Property financing: planned soundly.

Equity, fixed-rate period, repayment and funding: how to finance a property so that the repayment still fits in ten years.

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Manfred BraunAs of October 2026 · 3 minute read

Equity

Banks usually expect you to cover at least the purchase costs yourself. With an additional 10 to 20% of the purchase price, you will generally get better terms. Full financing is possible, but more expensive and only with very good creditworthiness.

Repayment, interest and amortisation

As a rule of thumb, the monthly repayment should not exceed 35 to 40% of your net income. A higher initial repayment rate makes you debt-free sooner. Special repayments give flexibility for bonuses or inheritances.

Fixed-rate period and follow-up financing

When interest rates are low, a long fixed-rate period pays off; when they are high, a shorter one. What matters is that the repayment remains affordable once it ends. A forward loan secures rates several years before expiry. After ten years, you can terminate a loan with six months' notice without a prepayment penalty.

Funding

KfW supports, among others, families, the purchase and renovation of existing buildings and energy-efficient new builds. For renovations, BAFA grants are also available. The programmes change regularly, and applications usually have to be made before signing the contract or starting the work.

Investors

With let properties, interest on loans and depreciation are deductible as income-related expenses. A conservative calculation with reserves for vacancy and maintenance is essential. On request, we put you in touch with experienced, independent financing partners.

This guide provides a general overview and does not replace legal, tax or financing advice.

Frequently asked questions

Property financing in brief.

How much equity do I need?

Banks usually expect you to cover at least the purchase costs yourself. With an additional 10 to 20% of the purchase price, you will generally get better interest rates. Financing without equity is possible, but more expensive and only with very good creditworthiness.

How high is real estate transfer tax in Saxony?

In Saxony, real estate transfer tax (Grunderwerbsteuer) has been 5.5% of the purchase price since 1 January 2023. For movable items sold with the property, such as a fitted kitchen, a reasonable amount can be stated separately.

What do the notary and land register cost?

Together around 1.5 to 2% of the purchase price. The fees are set by law and depend on the purchase price and the financing. They are usually paid by the buyer.

Do I have to pay tax when I sell?

Gains from selling private property are tax-free if more than ten years lie between purchase and sale, or if you lived in the property yourself in the year of sale and the two preceding years. Otherwise, income tax may be due on the gain. Please consult your tax adviser.

What is the speculation period?

The ten-year period between acquisition and sale of a privately held property that is not owner-occupied. After that, the gain is tax-free. With inherited property, the deceased's period continues.

How long should the fixed-rate period be?

When interest rates are low, a long fixed-rate period pays off; when they are high, a shorter one. What matters is that your repayment remains affordable once it ends. A bank or an independent financing adviser can calculate various scenarios for you.

What funding is available for buyers?

The KfW, Germany's state development bank, supports families buying or building a home, the purchase of existing buildings in need of renovation followed by their refurbishment, and energy-efficient new builds, among others. Programmes and conditions change regularly. Check the current position with the KfW or your bank before you sign a purchase contract.

What is a financing confirmation?

Confirmation from your bank that it will, in principle, finance the purchase. It shows the seller that you are a serious buyer and is often a prerequisite for a notary appointment.

Do you help with financing?

On request, we put you in touch with experienced, independent financing partners. The advice and the decision remain with you and your bank.

Can I deduct the fitted kitchen from the purchase price?

Yes. For furnishings sold with the property, such as a fitted kitchen or an awning, a reasonable amount can be stated separately in the purchase contract. No real estate transfer tax (Grunderwerbsteuer) is payable on it. The value must be realistic.

All questions on this topic in the knowledge base

Sample documents