Buying a property is a big financial decision that requires careful planning. One of the most important questions buyers ask themselves is: How do I calculate my budget correctly? What financing options are available? And how do I find the right advice? In this blog post, we give you a detailed overview to help you prepare for the purchase of your dream property.

1. how do I calculate my budget correctly?

Before you start looking for a property, it is important to realistically assess your budget. The following points should be taken into account:

1.1 Determination of equity

Equity is the amount that you can contribute to the financing yourself. As a rule, banks expect you to put up at least 10-20 % of the purchase price as equity. The more equity you have, the more favourable the loan conditions.

1.2 Calculating the monthly charge

Your monthly instalments for the property loan should be planned so that they are affordable. A rule of thumb is that your loan instalment should not exceed 30-40 % of your monthly net income. Calculate:

• Revenue:Monthly net income
• Fixed costs:Rent, insurance, cost of living, other loans
• Allow for a buffer:Unexpected expenses should be taken into account

1.3 Plan for additional costs

In addition to the actual purchase price, there are additional costs that are often underestimated:

• Real estate transfer tax(depending on the federal state 3.5-6.5 % of the purchase price)
• Notary fees and land register entry(approx. 1.5-2 % of the purchase price)
• Brokerage fees(depending on the region up to 7.14 % of the purchase price)
• Renovation costs(if necessary)
• Incidental costs of the property(house rent, energy, maintenance reserves)

If you take these factors into account, you will get a realistic idea of the budget you have available for buying a property.

2. are there any financing options that you can recommend?

There are various financing models for property buyers. Which option is best for you depends on your financial situation, your future plans and your willingness to take risks.

2.1 Annuity loan - the classic option

The annuity loan is the most common form of financing. You pay a constant monthly instalment over the entire term, which is made up of interest and repayment. Advantages:

• Plannable monthly instalments
• Secure over the entire term
• Option to make unscheduled repayments

2.2 Fully amortising loans - for long-term planning

With a full repayment loan, the entire remaining debt is paid off within the fixed interest period. This allows you to benefit from better interest rates. Advantages:

• No residual debt at the end of the term
• Long-term interest rate security

2.3 KfW loans - utilising state subsidies

The Kreditanstalt für Wiederaufbau (KfW) offers low-interest loans for property purchases and energy-efficient renovations. Advantages:

• Lower interest rates than with traditional banks
• Grants for energy-efficient measures

2.4 Variable loans - flexible interest rate adjustment

With variable-rate loans, the interest rate is regularly adjusted to the current market interest rate. This variant is more suitable for buyers who are willing to take risks and speculate on falling interest rates. Advantages:

• Opportunity to benefit from falling interest rates
• Flexible adaptation to the market situation

2.5 Home loan and savings contract - planning for the future

With a home loan and savings contract, you can save up equity over the years and secure favourable interest rates for a future property purchase. Advantages:

• Plannable savings phase
• Securing favourable interest rates

3. can you put me in touch with banks or financial advisors?

Professional financial advice can help you find the best conditions for your property loan. Here are some ways to get good advice:

3.1 Banks and savings banks

Many buyers turn to their house bank or a savings bank first. These often offer solid financing solutions, but not always the best interest rates. Advantage:

• Personal contact person
• Often uncomplicated processing

3.2 Independent financial advisors

Independent advisors can compare financing offers from different banks and secure the best conditions for you. Advantage:

• Comparison of different banks
• Personalised advice without sales pressure

3.3 Online comparison portals

Platforms such as Interhyp or Dr. Klein offer a quick comparison of financing options and arrange favourable loans. Advantage:

• Quick overview of the market
• Direct contact with banks possible

3.4 Recommendation of estate agents or property developers

If you buy a property through an estate agent, they can often recommend financing partners. Advantage:

• Customised solutions for your property
• Cooperation with specialised banks

Conclusion

Solid budget planning and choosing the right financing option are crucial for a successful property purchase. By realistically calculating your monthly outgoings, examining different financing models and taking advantage of professional advice, you can ensure that your property purchase is sustainable in the long term. Take advantage of the available financing options and subsidies to get the best conditions and seek expert advice to avoid pitfalls.