Can I get mortgage financing?

What the law requires of the bank

Before any property loan to consumers, the bank must check your creditworthiness. It may conclude the contract only if, after this check, it is likely that you will meet your obligations as contracted (§ 505a BGB (German Civil Code)). This is a duty of the bank, not a favour.

How thoroughly it checks is governed by § 505b para. 2 BGB (German Civil Code). The bank needs sufficient information on income, outgoings and your other financial and economic circumstances. It must not base its assessment mainly on the flat being worth more than the loan. A good property therefore does not make up for income that is too tight. The bank gets the information from internal and external sources, including your own disclosures, and checks it, where necessary, against documents (§ 505b para. 3 BGB). In practice this usually includes a query to a credit agency such as Schufa.

How the traffic light classifies

The traffic light asks six questions and awards points for each answer. A permanent job or civil servant status, equity above the additional costs and a payment below 35% of net income earn two points each. No probation, no ongoing loans and a clean Schufa earn one each. From 7 points the traffic light shows green, from 4 amber, below that red. A negative Schufa entry deducts 9 points and therefore always leads to red.

The weightings are our assessment, not a bank's rule. Each bank assesses by its own system, which it does not disclose. The traffic light shows you where to start before you submit an application.

Household calculation: does the payment fit?

The bank sets your income against your outgoings. On one side are net salaries, depending on the bank also child benefit or rental income. On the other are living costs, insurance, ongoing loans and the future costs of the flat such as the service charge (Hausgeld). What is left must carry the payment, with a buffer.

As a rule of thumb, our affordability calculator gives a payment of 30 to 40% of net household income. An example: of €4,500 net, 35% is a payment of €1,575. At 3.8% interest and 2% repayment, it supports a loan of €325,862 (€1,575 times 12, divided by 5.8%). The Deutsche Bundesbank reports effective interest rates of 3.81% to 4.40% for August 2026, depending on the fixed-rate period. At 4.4% it would be only about €295,300.

How much is actually possible depends on your fixed outgoings. With children, a car and a double burden of rent and payment until you move in, even the lower limit can get tight. The detailed calculation is on the page How much property can I afford?

Equity and loan-to-value ratio

A purchase in Berlin incurs around 11.57% in additional costs: 6.0% real estate transfer tax (Grunderwerbsteuer), a cautiously estimated 2% for notary and land register and 3.57% buyer's commission. On a purchase price of €400,000 that is €46,280. Banks generally finance more readily if your equity at least covers these additional costs. Few banks offer loans above the purchase price, usually with an interest surcharge.

The second figure is the loan-to-value ratio (Beleihungsauslauf): the loan in relation to the value the bank assigns to the property. The bank determines this lending value (Beleihungswert) cautiously, and it can be below the purchase price. The higher the ratio, the higher the interest rate as a rule, because the bank bears more risk. The ways and limits of buying with little equity are described in the guide Buying with little equity.

Employment, probation, self-employment

The bank wants to see that your income will last. A permanent employment contract and civil servant status are considered the safest basis. During probation many banks decline or wait until it is over. The reason is in the law: during an agreed probationary period of no more than six months, the employment can be terminated with two weeks' notice (§ 622 para. 3 BGB (German Civil Code)).

With fixed-term contracts it depends on the bank and the profession. Self-employed people submit income tax assessments and business analyses; how many years the bank wants to see, it will tell you beforehand. The traffic light asks about three years of self-employment as a rough line.

If you buy as a couple, both incomes count if both sign the loan agreement. Both are then also liable for the full sum.

Schufa and ongoing loans

Negative entries at a credit agency, such as a terminated loan or a debt in collection, often lead to refusal by banks. So check your data before the first conversation with a bank. Under Article 15 GDPR you are entitled to a free copy of the stored data. If information is wrong, you can demand rectification under Article 16 GDPR.

The bank counts ongoing instalments for a car, furniture or consumer loans in full against your room for manoeuvre. Whoever pays off a small loan before the purchase improves the household calculation by its entire instalment. Whether that is worthwhile, weigh against the equity you use for it.

Documents to have ready

About you: ID, the last payslips and the employment contract, proof of equity such as bank statements, securities account or building society savings contract, plus an overview of ongoing loans. Self-employed people also need income tax assessments and business analyses.

About the property: brochure, land register extract (Grundbuch), cadastral map, living space calculation, floor plans and energy performance certificate. For an owner-occupied flat there are also the declaration of division (Teilungserklärung), budget plan, the latest service charge statement and the minutes of owners' meetings. Request these papers early from the seller or agent.

Typical reasons for refusal and what you can do

A refusal from one bank does not mean all banks will refuse. Institutions weigh profession, equity and property differently. Ask for the reason. And do not submit many applications at once at random, but have your situation assessed first.

How much floor space your budget gives in the districts is shown by the buying power check. Whether buying pays off against renting is compared by Rent or buy in Berlin.

After the assessment: the financing confirmation

Once your situation is settled, a financing confirmation is worthwhile. In it, the bank confirms a framework after an initial check. It is not yet a binding commitment for a specific property, because the bank only checks the property once it is settled. Sellers usually take prospective buyers with a confirmation more seriously, and with several interested parties it can tip the balance.

Before the contract, the bank must give you the European Standardised Information Sheet (§ 491a BGB (German Civil Code)), which you can use to compare offers from different banks directly. After signing, as a consumer you generally have a right of withdrawal (§ 495 BGB).

Assessment before the bank meeting

At our firm, Maximilian Vigansky personally handles the brokerage of property loans (Immobiliardarlehensvermittlung under § 34i GewO, the German Trade Regulation Act). He assesses your documents, compares offers from several banks and accompanies you through to payout. Only the bank can give a loan commitment. The register details are in the Legal notice (German). If we receive money from a partner, we will tell you beforehand. How the fixed-rate period, repayment and the process through to payout work is explained in the guide Mortgage financing in Berlin.

Sources

• § 505a BGB (German Civil Code), duty to assess creditworthiness; § 505b BGB, basis of the creditworthiness assessment
• § 491a BGB (German Civil Code), pre-contractual information; § 495 BGB, right of withdrawal
• § 622 BGB (German Civil Code), notice periods for employment relationships, paragraph 3 probationary period
• General Data Protection Regulation (GDPR), Article 15 (right of access) and Article 16 (right to rectification)
• Deutsche Bundesbank: residential mortgage loans to households, effective interest rates on new business (August 2026, provisional, as of 1 October 2026)
• BBI: Additional purchase costs in Berlin (6.0% real estate transfer tax, 1.5 to 2.0% notary and land register, 3.57% buyer's commission)
• All sources accessed on 28 October 2026.