Real estate financing in Berlin at a glance

Are you toying with the idea of buying a flat in Berlin? Owning your own four walls in the German capital might actually be within your grasp. All you need is a well-thought-out plan and Berliner Sparkasse at your side – a strong partner offering real estate financing and related advice.

Financing your dream property in Berlin

When buying or building a new home, you’d usually take out one or several loans and pay this borrowed capital back each month over many years. Berliner Sparkasse offers an impressive portfolio in this respect, including:

• Traditional annuity loans
• Forward loans
• Bullet loans in combination with a home savings plan
  

Tip: In addition to loans from financial institutions, you may also be eligible to benefit from government subsidies, such as those provided by KfW Development Bank. We’d be more than happy to advise you on the options available to you.

Your personal circumstances will determine what financing package is right for you. As for your loan repayment schedule, this will be stipulated in the terms of your contract and should be set up in such a way that you’ll always be able to cover the monthly instalments, now and in the future. You shouldn’t forget to factor in all the extra costs associated with buying a property – in other words, any costs not included in the actual purchase price. For example:

• Notary and land registry fees (approx. 2 percent of the purchase price)
• Real estate transfer tax (6 percent of the purchase price in Berlin)
• Estate agent fees (negotiated on a case-by-case basis when purchasing a property via an estate agent – usually 50 percent of the total fee in Berlin, which equates to up to 3.57 percent of the purchase price and is to be paid by the buyer)
• Additional building costs in the case of new builds (usually 15 to 20 percent of the building costs)

Tip: When determining how much you need to borrow, always take the above extra costs into account. Try to contribute at least 20 percent of the amount to be financed from your own capital. You should also be able to use that to cover the extra costs of your purchase. The higher your own contribution, the more favourable your loan’s terms will be in the majority of cases.

You’ll also have to pay interest to the financial institution lending you the money. The amount of interest you’re charged is referred to as the interest rate or borrowing rate. The interest rate depends on how much capital you’ve contributed yourself, your requirements, the loan offer and various other aspects. In this context, you should be aware of the following three interconnected factors:

1. Fixed interest rate

• A fixed interest rate is one that stays the same over a defined period of time. As property loans are taken out for several years and the interest rates usually fluctuate during this timeframe, a long-term fixed rate gives you greater peace of mind when it comes to planning for the future. However, the longer the fixed-rate term, the higher the interest rate set by your financial service provider will usually be.
• To a certain extent, you can decide for how long you want to fix it. 5-year intervals for a period ranging from 5 to 20 years are typical. In conjunction with a home savings account, you’ll be able to fix for an even longer period.
   

2. Monthly repayment instalment

• In order to pay off a loan, you’ll make a monthly instalment calculated as a percentage of your loan. The higher the agreed instalment, the more quickly you’ll pay off your loan; the lower the instalment, the longer it will take you. Bear in mind that you’ll pay more interest overall in the case of a lower instalment because it will take you more time to clear the outstanding debt.
   

3. Early repayments

• Depending on the loan agreement, you may have the option to make early repayments outside of the agreed schedule in order to pay off your total loan more quickly. By doing so, you also reduce the outstanding debt more quickly and thus the amount that is subject to interest for the remainder of the loan term. Your loan agreement will stipulate when you can make early repayments, the permitted amount of these, and whether this will incur additional charges. We recommend speaking to your advisor to clarify this in terms of your specific conditions.

It’s important to note that most loan agreements will still have an outstanding debt once a fixed rate comes to an end. To pay off the remainder, a follow-up financing plan will then be agreed, which is an additional loan subject to new terms and conditions. You can enter into this kind of plan up to 36 months prior to the end of your fixed rate in order to lock in current interest conditions early on.

Our tip: By opening a home savings account now, you’ll be able to secure a low-interest loan in the future. You’ll also be able to use the amount held in this account for clearing your outstanding debt once your fixed interest rate comes to an end. In light of the current uncertainty in terms of interest rates, an LBS-Bausparen home savings plan is ideal – whether for contributing your own capital when buying a property, paying off a follow-up financing plan or renovating your home at a later date.

Support is on hand for your property plans in Berlin

If you need financial advice on building, buying or renovating a property, or want to learn more about follow-up financing, the experts at our Berliner Sparkasse Real Estate Centres will be more than happy to help – in English, too! Give us a call on (030) 869 869 06 or make an appointment online on our website.

From your very first consultation to your loan being disbursed, a consistent contact person will guide you through all the steps of buying your property. You’ll also benefit from a quick lending decision and speedy processing.

Berliner Sparkasse is your reliable partner for all things financial

Berliner Sparkasse offers low-interest loans, public subsidies and property advice in Berlin on the foundations of an equal partnership. Let our expertise put you on the right track to accomplish your real estate vision. We’ll act quickly to fulfil your requirements so that you can realise your dream of owning your own home, minus the financial worries.

The advantages of Berliner Sparkasse’s real estate services

• A varied real estate portfolio in Berlin and the surrounding area
• Comprehensive advice on real estate financing and a consistent contact person
• Attractive conditions
• Personalised financing plans
• Advice on available government subsidies
• Home savings plan
• If needed, additional support in terms of insurance for living in Berlin

Discover our real estate center Berlin with numerous positive Google reviews!

Rely on our expertise for top-notch consultation on real estate purchase and financing. Get in touch with us today for professional assistance on your journey to your dream home!

Tip: Are you thinking about buying a flat or house in Berlin, but don’t know where to start? Are you wondering what kind of property and area you could even afford? Berliner Sparkasse has the answers to these and other questions on your search for real estate in Berlin. We’ll work with you to determine your budget and create a financing plan for your dream home.

Book a personal consultation online or ring our customer service hotline on +49 (0)30 869 869 06. We’re looking forward to hearing from you!

The advantages of going through an estate agency

• Knowledge of the market: An estate agency based in Berlin will have in-depth knowledge of the capital’s property market, including current prices and trends.
• Strong negotiation skills: An estate agency will pick out suitable properties for you and professionally negotiate with sellers to get you the best conditions.
• Less time and effort: Since an estate agency searches for properties on your behalf, arranges viewings and notary appointments and takes care of all written correspondence, you can save yourself a lot of time and effort.
• Contractual and legal expertise: Estate agents are well versed in contractual and legal matters, so you can rest assured that all transactions relating to your new property will be dealt with correctly from a legal perspective, thereby minimising potential risks.

As an estate agency, BSK Immobilien GmbH offers you a vast array of services – from finding you a property to handing over the keys. So, what are you waiting for? Contact our real estate pros today.

You can reach BSK Immobilien GmbH online or via its hotline (030) 869 847 60.

If you need financial advice on building, buying or renovating a property, or want to learn more about follow-up financing, the experts at our Berliner Sparkasse Real Estate Centres will be more than happy to help! Give us a call on (030) 869 869 06 or make an appointment online on our website.