As team leader for bank products, Dirk Eilinghoff is responsible at Finanztip for the topics of financial investments and retirement provisions. Experience in this area he brings from his work as an independent financial and fee consultant. In earlier years, the graduate historian and business graduate managed charitable projects at the Bertelsmann Foundation and the Korber Foundation.
- With the cheapest construction financing for your property you save thousands of euros in interest.
- The construction interest rate at the end of January 2022 is about 1.15 percent (fixed interest rate: 10 years, loan to value: 80 percent).
- Building interest for 15 years is currently about 1.45 percent.
- Compare the offer of your bank with that of a major loan broker.
- Check your budget with the Finanztip mortgage calculator.
- Then get a first offer: The major credit brokers offer a good market overview. We recommend Dr. Small, Interhyp and Planethome.
- If you have a house bank or find a single bank particularly good, you can also talk to it about your construction financing.
In this guide
If you have a Financing a new property want to to live in it yourself, then this guide is exactly the right one for you. If you already have a construction financing, you will find important tips in our guide An-schluss-fi-nan-zie-rung. If you want to use real estate as an investment, read more about it in the investment guide.
How much may the real estate cost?
From the first thought of their own four walls to move in often take years. Money plays an important role here: from the suitable Budget to the Financing of the property. A fast way to a realistic estimate of your budget offers you the Finanztip mortgage calculator.
Result
How to proceed
Look for a suitable property and then get a concrete financing offer. Our recommendations for loan brokers are Dr. Klein, Interhyp and Planethome.
With our calculator you have determined the two most important figures for your real estate purchase: the Purchase price, you should not exceed in your search for the house or apartment, and the Loan amount, that you finance. This ensures that you do not overextend yourself with the financing – and you can now start looking for the right property.
Further tips on how to monthly rate for your construction financing and which one to use Part of the income You should spend at most on the subject of housing, we give you further down in this text.
How much equity do you need?
Equity is one of the most important issues in real estate financing. With the equity capital you finance on the one hand the direct Incidental purchase costs, on the other hand a part of the purchase price. This is shown in the following table.
Table: Small balance when buying real estate
| Cash for additional purchase costs | equity |
| New house / new apartment | Equity capital and building loan |
Source: Finanztip, own representation
As equity you can use everything that you to make money to pay the purchase price or the incidental costs. This includes above all Credit on current, savings and call money accounts, but also credit balances from home loan and savings contracts. It is particularly practical if the building savings contract is already ready for allocation. Then you can call this money at short notice. A building society loan from an old contract, on the other hand, is usually not worthwhile.
Another source of equity are shares and other securities (such as mutual funds). Most of these papers can be sold at short notice. If your equity is rather scarce, a sale might make sense in most cases. If you can comfortably handle the financing, you should consider whether you expect an increase in value.
You can find further saved capital in private life insurance and Riester contracts. Both provide equity on the one hand, on the other hand you must deductions on your credit balance or (in the case of the Wohn-Riester withdrawal) observe extensive rules.
Are there fixed requirements for the amount of equity?
In principle: At least the ancillary costs of the real estate purchase you should be able to pay from your own capital. Otherwise it will be difficult to find a lender at all.
Ideal it is, if the equity at least the incidental costs and 20 percent of the purchase price covers. Then the risk for the bank sinks so clearly that you the low building interest optimal uses. Should it be necessary for the formula "Additional costs plus 20 percent of the purchase price" are not enough, the banks are satisfied, however, also with significantly less.
Keep in mind, however, that you should keep an emergency reserve after financing. As a rule of thumb, two to three months’ salary is often recommended. Alternatively, you can ensure with a call or framework loan that you quickly get money, if, for example, a major repair is pending.
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How high are the additional costs?
The incidental costs of a real estate purchase amount to between about 5 and 12 percent – depending on how high the land transfer tax is and whether a broker is involved.
The costs are made up of:
- the Notary and land registry costsThey are (as a guideline) about 2 percent.
- the Real estate transfer tax: It is (depending on the state) between 3.5 and 6.5 percent.
- of the Real estate agent commission: The amount is not regulated by law. Often the broker requires from the buyer 3 percent plus VAT., so 3.57 percent.
If you sell without a broker in a state with a low real estate transfer tax (Bavaria or Saxony), you only have to pay a total of 5.5 percent. With a real estate agent and high land transfer tax, however, you are at 12 percent.
After all: Through a Legal change to the broker commission, which has been in force since the end of 2020, a seller who hires a broker must in the meantime pay a broker’s commission in the same amount pay as the buyer. As a result, in federal states such as Berlin, Brandenburg, Hamburg and Hesse, the buyer’s commission has fallen significantly compared to the old regulation.
The notary and land registry costs always depend on the actual expenditure of the land registry office and the notary public. The 2 percent given here is a guideline. The amount of the buyer’s commission is not regulated by law.
Where can you find favorable real estate financing?
If the object found If the purchase price is fixed and the loan amount has been determined, you should Bank or a Intermediary get a first offer for a real estate financing. In principle, you can also go to a savings bank in the first step Building society go.
In any case, let the consultant explain to you why he/she is proposing a particular financing concept. This concerns especially Financing with building society contracts (so-called building savings instant financing). Even if the interest rates seem particularly favorable at first glance: Financing with building savings contracts is usually unnecessary complicated and often more expensive than a simple bank loan with fixed installments (a so-called annuity loan).
In any case, take documents about your desired property with you to the first financing meeting, at least the expose. If you want to better understand how interest and repayment flow into the financing concept, read in advance the section on basic terms in construction financing.
During the first financing discussion, you will often find that your personal interest rate is higher than the offers from the advertisement. This is because the interest rates from the advertisement usually only apply to financing with a lot of equity capital. In addition, without further documentation on your income and assets, you will initially receive only a non-binding financing offer.
The following overview shows which characteristics banks look at more closely for a binding offer:
Banks see this as positive
Banks see this critically
- civil servant status
- employment relationship
- own use of the property
- high fixed salary component
- real estate in good locations
- Newly built properties or properties in good condition
- high Schufa score
-
with employees
- Self-employment
- high variable salary component
- Properties that are rented out (not relevant for all banks)
- Real estate in less good locations or in poor condition
- low Schufa score/negative entries
Also get a first offer so explain, that you have fully understood it (for example, with regard to interest rates and terms). Only then are you in a position to compare this offer with those of other banks compare.
Which advantages have the large credit mediators?
Regardless of whether your first step was with a bank, a building society or a credit broker, you should always make the most of the discussions organize so, that you have on your way a current overview about the offers if possible of many banks receive.
This means: If you were at a bank or building society for the initial interview, you should then go to one of the large credit intermediary go. The nationwide construction financing intermediaries have the advantage that they can compare the offers of several hundred banks, insurance companies and building societies. We recommend:
- free and non-binding advice
- works mainly with independent consultants
- more than 400 banking partners, including savings banks and Volksbanks
- telephone and on-site advice from over 550 advisors nationwide
- additionally also consultation at home with the customer possible
- specialized in construction financing
- free and non-binding advice
- works exclusively with employed consultants
- more than 500 financing partners, including savings banks and Volksbanks
- telephone, video and on-site advice (more than 100 locations nationwide)
- free and non-binding consultation
- works exclusively with employed consultants
- more than 220 financing partners, including savings banks and Volksbanks
- telephone and on-site consulting in 14 branches nationwide
Which bank should you choose?
Who calculates hard, should choose at the end the bank, which makes the best offer does, i.e. charges the least interest. A good benchmark for the comparison is the interest rate or also the Residual debt at the end of the fixed interest period. The fixed-interest period must however in such a comparison of several offers in each case right away its. For you it makes no difference whether you receive the building loan directly from a bank or through a credit intermediary.
An important point on the other hand is processing time of the chosen bank. With the tight supply of real estate available in many locations today, it is important to have especially quickly a binding credit decision or be able to show credit approval. So ask in any case, how long the most favorable bank for the processing of the loan application requires. Sometimes (but by no means always) a bank with which you have your Salary account lead, something fast. When processing your application, she can take a quick look at your account to check your income and regular expenses.
What percentage of income are you allowed to spend?
If you use the Budget for your construction financing do not want to determine with the help of our mortgage calculator, you can follow a rule of thumb or also start from your personal situation.
This concerns approximately the possible Rate for your construction loan: The easiest way to determine these is with a simple rule of thumb: It is considered financially "healthy" if you have at most one third of the Net household income for housing, either for the rent or for the construction financing to the bank.
This rule of thumb probably has its origin in the actual burden of most tenants. According to figures from the Federal Statistical Office, this rent burden is often around 30 percent. However, the "cold" service charges or operating costs (such as water, property tax or garbage collection), which the tenant pays, here already include.
Example calculation: monthly installment according to a rule of thumb
| Household income | + 4.500 € |
| One third for housing are then: | + 1.500 € |
| Deduction of "cold" ancillary costs / operating costs | – 200 € |
| Deduction of house allowance for condominium | – 200 € |
| This is how high your credit installment (interest and repayment) per month be: |
= 1.100 € |
If you do not want to calculate the possible loan installment according to a rule of thumb, you can also deduct from your personal situation assume. If you still live in the rent, the calculation begins with your current cold rent. This is omitted after the move to the new property. Heating and electricity costs, on the other hand, you still have to pay, as well as the costs for garbage collection or property tax. Just as individual as your current cold rent is the amount that you have been able to save monthly.
Example calculation: monthly rate based on cold rent
Your current cold rent
per month:
How much money you save
on average per month?
This is how high your loan installment may be
(interest and repayment) per month:
The result of the individual calculation does not necessarily have to correspond to the rule of thumb.
This is how you get from the monthly rate to your budget
How much of Credit The amount you can afford with this monthly installment depends, among other things, on how much rent you can afford Time you want to give you for the repayment of the loan: The longer you raise this amount month after month, the more higher is the loan amount.
Many homeowners plan to save rent-free to live. Then the house or apartment must be at the latest by the time you retire be paid off. So if you start your construction financing at the age of 40 and want to retire at 65 or 67, you will have 25 or 27 years to save up.
You can easily find out how much the loan amount is for a given monthly payment and interest rate with our mortgage calculator. For an installment of 820 euros and a term of 30 years, at an interest rate of 2.5 percent per year, this calculates to a maximum loan amount of 215.000 euros.
What are the basic terms of construction financing?
To a construction financing you will still hear some terms from your financial advisor. It is good to know.
Debit interest rate, effective annual interest rate, nominal interest rate – In the past, the effective interest rate and nominal interest rate differed for most bank loans, mainly because the interest rate was fixed during the year. The effective interest rate was slightly higher than the nominal interest rate.
Since then, however, things have changed: In 2010, the Consumer Credit Directive replaced the nominal interest rate with the borrowing rate. The debit interest rate is the percentage rate that is applied to the loan per year. The effective interest rate, on the other hand, takes into account other costs of the construction financing. Since 2016, banks have to include the costs for the valuation and collateralization of the property in the effective interest rate. And: The effective interest rate is calculated for the entire term of the loan. The bank must therefore determine with which interest rate it continues to calculate after the end of the fixed interest rate. If she chooses a low debit interest rate, the specified APR decreases.
So the interest rates have become more confusing in recent years. Some brokers therefore give a comparative interest rate that only refers to the duration of the debit interest rate commitment.
Fixed interest rate period or target interest rate period – With the initial financing, you agree with the lender on a fixed interest rate, which is fixed for a certain period – the fixed interest period or target interest rate. If the building loan has not been repaid by the end of this period, the bank and the customer agree on a new interest rate when the loan is taken out.
As a general rule, the shorter the fixed-interest period, the more favorable the interest rate offered by the bank. At the same time, a short period increases uncertainty: interest rates can rise up to the time of the loan extension, and thus – despite a lower residual debt – the monthly installment can also rise.
Therefore, it is important to weigh up: A long fixed-interest period makes the loan more expensive than a short one, but the risk of interest rate changes is reduced. If you want to avoid this risk altogether, you should aim to repay the loan in full by the end of the fixed-interest period. In any case, a good advisor can calculate how high interest rates must rise so that, say, a 15-year term is more favorable than the interest rate for ten years.
Repayment rate – In the case of a standard bank loan, a fixed monthly installment is agreed upon, which is made up of an interest and a repayment portion. How the rate for such an annuity loan is calculated, you can see in the following example for a loan of 100.000 euros (with an interest rate of 2 percent and an initial repayment rate of also 2 percent):
This is how you calculate the monthly installment from the loan amount
| Loan amount | 100.000 € | |
| Debit interest per year | x | 2,00 % |
| in euros per year | = | 2.000 € |
| in euros per month | : 12 | 167 € |
| Loan amount | 100.000 € | |
| Initial repayment per year | x | 2,00 % |
| in Euro per year | = | 2.000 € |
| in Euro per month | : 12 | 167 € |
| Total installment per month (annuity) | 334 € |
The remaining debt is reduced with each monthly installment. Since always the same amount is transferred, thus the repayment portion increases. You have already determined which repayment rate you should start with when calculating the maximum purchase price. Standard bank financing is usually offered with a repayment rate of 2 percent. This is usually too little to be debt-free at the start of retirement. Therefore, you should not deviate from the first determination.
Type of repayment – Instead of an annuity loan, bank representatives or brokers occasionally recommend construction financing in which the repayment is not used for the construction loan but for another savings contract – a building society savings contract, a fund savings plan or a life insurance policy. However, these repayment methods can be risky. The calculation only works if the savings contract, after deduction of costs and taxes, brings more increase in value than the loan costs. If you want to avoid additional financing at all costs, you should reject such concepts. Exception to this rule are building savings instant financing. They can occasionally be favorable. However, the comparison with a bank loan is not easy, because the building societies do not usually indicate the effective interest rate for the whole concept so far.
Unscheduled repayments – Unscheduled repayments are a good opportunity to accelerate repayment of the loan. Most banks offer unscheduled repayment options on their own, such as 5 percent of the initial loan amount. For a higher unscheduled repayment, they usually also charge a higher interest rate. A higher ongoing repayment, on the other hand, the credit institutions usually reward with a better offer. So you have to weigh what rate you can bear in the long term. Opportunities for unscheduled repayment bring more flexibility in any case; however, you should only pay for it (with a higher interest rate) if you can really use it – i.e. expect surpluses from Christmas bonuses, bonuses or inheritances.
Now you know roughly how the structure of your real estate financing should look like. We recommend that you check your planning with the Finanztip redemption calculator. Then you can start looking for the most favorable building loan providers.
Our repayment calculator provides a detailed repayment plan. It calculates the monthly charge for a loan as well as the residual debt that you still have to pay off after the fixed interest period has expired.
How we tested
In our March 2017 test, providers had to meet the following conditions for us to recommend them:
Specialized advisors for construction financing – With the large credit mediators the customer meets specialized advisors. The probability of finding the right financing concept and the best lender is therefore higher than with intermediaries who only arrange construction financing now and then.
Comparison of offers on own software platform – Only a few intermediaries have their own software platform on which the banks store their conditions and credit guidelines. In Germany, the platforms of Dr. Klein (Europace), Interhyp (Prohyp) and Planethome represented. Other intermediaries use these platforms.
The advantage of an in-house software platform is that the customer makes the most of competition between banks. Because there are several hundred providers competing for each customer on the brokerage platform. In contrast to an inquiry at a single bank, the customer therefore immediately receives a comprehensive market overview.
In the meantime, other providers such as Targobank or Commerzbank also use the software platforms of the three providers. However, in our opinion, it is not ensured that the customer really gets to see all the competing offers.
Nationwide field of activity – We only consider intermediaries who advise customers throughout Germany, whether in person on site or over the phone. These are often also the largest companies. And the larger an intermediary is, the more likely it is that customers can get the best conditions through quotas that the intermediaries take from individual banks.
Broad product range – Intermediaries must offer all common types of real estate loans. These include annuity loans, forward loans, subsidized loans (e.g. from the state development bank K), constant loans (with a building savings contract) and loans for modernization or conversion.
Meet the conditions we set Dr. Klein, Interhyp and Planethome.
Overview of mortgage brokers
Source: Information provided by the providers (as of 29. March 2017)
Dr. Klein and Interhyp have the most branches, while Planethome is only just setting up its on-site advisory service. For most prospective builders, the route to Dr. Klein and Interhyp are currently even shorter. While Dr. Klein has significantly more branches, Interhyp can score points with a larger number of advisors. The differences in market coverage are likely to result primarily from the links with regional banks and savings banks. The smaller the number of financing partners of the credit intermediary, the more likely it is that the customer should also obtain an offer from a regional bank or savings bank. Because especially savings banks and credit unions have a lot of freedom in pricing and can possibly beat the best offer.
Unfortunately, the credit intermediaries do not provide lists of their financing partners. This would make it easier to assess the offers. In our query, Interhyp did not even want to break down how many banks were from which banking segments.
Apart from the number of branches and mortgage partners, the three providers differ in terms of their product range. While Interhyp and Planethome deal exclusively with the customer’s construction financing, intermediaries Dr. Klein also offers insurance and investment products.
In our view, this difference has advantages and disadvantages for the customer: When restricting to construction financing, risk protection (for example, in the form of ri-si-ko-le-bens-ver-si-che-rung or Be-rufs-un-fa-igkeits-ver-si-che-rung) is left out of the equation. This should be considered however with a construction financing with.
On the other hand, with the Allfinanz consultation you receive offers for further insurance and provision products after the construction financing, which cause additional costs. In case of doubt, you should then check on our pages whether the insurance policies offered make sense.