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Money Matters: Can you get a mortgage for a buy-to-let property in Berlin?

October 6, 2015Article by Clare Moorhouse

Using finance carefully and responsibly when investing in property can be advantageous to investors. The good news is, if you are considering taking finance to purchase our superb buy-to-let opportunity at Stadtpark Steglitz in Berlin, obtaining a mortgage in Germany, and in particular in Berlin, isn’t any harder than in other countries in the world.

In keeping with our ethos of assisting clients with their investment decisions, Property Frontiers has teamed up with MLP, a Berlin-based Fund Manager, who is familiar with Stadtpark Steglitz and is able to offer our investors viable and competitive mortgages.

Here we ask Peter Kleinwaechter, Senior Consultant at MLP, some of the most frequently asked questions to help those who are interested in investing to understand what finance options are available to them:

1. What is the current state of the mortgage market in Germany?
Germany has been always the strongest economy within the European Union and one of the strongest economies around the world. For this reason, German mortgage rates are the lowest in the European Union. The mortgage market in Germany is in good order for both resident clients and non-resident clients and the application process is very simple.

2. As a German mortgage brokerage, are the mortgages you offer only available to German nationals or those living in Germany?
No. We also offer mortgages to international clients and can finance them with a loan amount of up to 54% of the purchase price.

In the event of a purchase price higher than €370,000 Euros, we can finance 70% of the purchase price through a mortgage.

3. How easy is it for foreign nationals to secure a mortgage for a property in Germany?
It’s very easy. We just need a copy of your passport, a proof of equity (for the down payment) and proof of income (last three payslips in case of employed clients or an accountant’s statement for 2014 and 2015 for freelancers).

4. What types of mortgages are available?
We offer fixed rate mortgages, where the interest rate is fixed for a certain period of time. The monthly rate you have to pay is the same during this period. It means as the repayment quota increases, the interest quota will decline over the years.

5. How is the repayment term structured?
Repayments are very flexible. The client has to pay back 1% of the loan in minimum per annum. They can change this rate on a scale between 1- 10% once a year and they also get the option to repay 5% of the initial loan additionally per year.

6. So when will I have to start making payments?
It depends on the payment plan. Once the client puts down their deposit, the lender starts disbursing the loan and repayments will commence.

7. What is the minimum deposit I would need to put down?
46% of the purchase price, or 30% for units above €370,000 Euros.

8. What factors do you take into account when applying for a mortgage?
A client’s income and equity.

9. I’m self-employed; can I still apply for a mortgage with you?
Yes, of course.

10. I’m a first time buyer; can I still apply for a mortgage with you?
Yes, of course.

11. Is there a pre-approval process before I am able to reserve a unit?
Unfortunately not. A pre-approval process is not offered at present but you can have a no-obligation consultation with us before you decide to reserve if you so wish. That way, we will be able to let you know whether your application is likely to be successful or not.

12. Are there any other costs I need to be aware of?
If the mortgage you are taking out is more than €100,000 Euros, with a fixed interest rate for 10 years or more, there is no cost as we are funded by the banks.

If the mortgage loan is less than €100,000 Euros or fixed interest rates < 10 years, there will be a fee of €500 Euros plus VAT.

13. How long will the mortgage run for?
Anywhere between 5 and 45 years. You can choose.

14. How long does the mortgage approval process take?
Around 2 weeks.

15. What is the main thing I need to be aware of before taking a mortgage?
Taking out a mortgage in Berlin is relatively easy and open to anyone with a deposit and proof of earnings.

With low mortgage rates, and a relatively straight-forward mortgage application process, there’s never been a better time to invest in our fantastic buy-to-let opportunity at Stadtpark Steglitz.

To request a free, no-obligation consultation with Peter, please call one of our Investment Consultants on +44 1865 202 700. 

 

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