Germany KFW Loan


The Kreditanstalt für Wiederaufbau (KfW) was established in 1948 with the aim of stimulating the German economy again after the war. Your capital is held by the federal government and to a lesser extent by the federal states. Today, KfW Bankengruppe, as it has been called for a number of years, promotes start-ups, medium-sized companies, municipal infrastructure measures as well as education and development projects.

The subsidies of the KfW banking group are granted in the form of low-interest loans, sometimes also as investment grants. The funding amounts are limited by maximum limits that relate to one residential unit. So if you build or buy a two-family house with two separate residential units, you can benefit from double KfW funding.

The KfW loans are generally processed through the house bank, which also partially assumes the risk.

KFW loans for first time buyers

You can apply for the "Energy Efficient Building (153)" loan under the KfW loan scheme until June 30, 2021.

Interest rate of 0.75%  p.a.

up to 120,000 euros per apartment

For everyone who is buying a new KfW efficiency condominium

The KFW loan scheme subsidies purchases of condominiums of new constructions that are classified with the energy standard KFW 55, 40 or 40+.

Very important KWF only lends against the purchase price for the residential building (excluding land costs).

You can choose between two forms of financing:

Annuity loan:

During the first years you don’t have to pay the repayment rate, you only pay the monthly interest - after the repayment free period you will have to pay the same monthly annuities (interest and repayment).

The duration of the repayment free period follows a schedule that is subject to the interest rate and the duration of the mortgage.

Bullet loan:

With bullet loans, you only pay the interest during the entire term and then repay the entire loan amount in one go.

The repayment allowance

You save money with the repayment allowance under the KFW loan scheme: with the repayment allowance you only have to repay the loan deducted by the repayment allowance.

KfW Efficiency 55 classified apartments you can get a maximum repayment allowance of 15% (18000 euro) of a loan amount of 120,000 euros.

Most of the mortgage brokers will not tell you about the KFW loan scheme because they won’t get a commission for brokering and the application creates additional work. Although it is possible for overseas buyers (non European citizens) to be eligible under the KFW loan scheme,  there are additional requirements in form of a legal opinion. The cost for a legal opinion can vary, but from our experience it shouldn’t cost more than 2500 Euro. The bank won’t pay for it so you have to cover the whole amount. Nevertheless you pay 2500 Euro to save up to 18,000 Euro. So it is definitely worth trying.

Getting a mortgage from a German bank