Foreigners moving to Germany often have the question of whether to rent or buy an apartment. Experts identify clear criteria to help you make the right financial decision. According to the analysis of the IamExpat portal, the main factor is not so much the desire to stay forever, as the duration of the planned stay and the amount of savings.
In Germany, unlike in many countries, renting is not considered a temporary compromise: the local market is strictly regulated, and laws reliably protect the rights of tenants. Therefore, for newcomers working on fixed-term contracts or who have lived in the country for less than two years, renting remains the preferred option. It provides the necessary flexibility and avoids the risks associated with fluctuations in real estate prices.
However, the situation changes if an expat plans to stay in Germany for a period of at least five years. According to experts, the purchase becomes financially justified if a number of conditions are met.:
1. Availability of capital.The buyer needs to have about 30% 35% of the value of the property, as banks require a minimum of 20% down payment, and another 10%15% will be spent on taxes, notary and real estate services.
2. Stable income and status.German credit institutions scrupulously check the residence permit and the type of employment contract. For freelancers, the process of obtaining a mortgage is more complicated, but it is possible.
3. The growth of rental rates.In large cities (Berlin, Hamburg, Munich), rent continues to rise in price, and the monthly mortgage payment for comparable housing often turns out to be equal to or even lower than the rent.
Mortgages in Germany have their own characteristics. Contrary to the floating-rate practice common in the United States and the United Kingdom, long-term fixed rates for 10, 15, and even 20 years are popular here, which allows borrowers to reliably plan their budget. In addition, experts advise expats not to miss the opportunity to obtain subsidized loans from the state-owned KfW bank, which are available regardless of the nationality of the buyer.
Source: IamExpat
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