German Mortgage Glossary — Key Terms Explained in English
Quick Answer: The German mortgage system uses specific financial and legal terms that can be confusing for expats. This glossary explains 30+ essential terms in plain English, from Annuitätendarlehen to Zinsbindung.
Key Mortgage Terms
- Annuitätendarlehen: Annuity loan — the most common German mortgage type, with fixed monthly payments combining interest and repayment
- Baufinanzierung: Property financing / mortgage — the general term for a home loan in Germany
- Beleihungswert: Lending value — the conservative value a bank assigns to a property (usually 80–90% of market value)
- Bereitstellungszinsen: Commitment interest — fees charged when a loan isn't drawn down within the agreed period
- Eigenkapital: Equity / down payment — your own funds used toward the property purchase
- Effektivzins: Effective annual interest rate (APR) — includes all fees and costs; use this to compare offers
- Grundbuch: Land registry — the official record of property ownership in Germany
- Grunderwerbsteuer: Property transfer tax — ranges from 3.5% to 6.5% depending on the federal state
- Grundschuld: Land charge — the security right registered against the property for the bank's mortgage
- Kaufnebenkosten: Additional buying costs — includes transfer tax, notary, land registry, and potentially agent fees
- Konditionsanfrage: Rate inquiry — a credit-neutral request to compare mortgage terms (does not affect SCHUFA)
- Notartermin: Notary appointment — the legally binding property purchase signing
- Sollzins: Nominal interest rate — the base rate before fees
- Sondertilgung: Special repayment — extra payments allowed per year beyond the regular schedule
- Tilgung: Repayment rate — the percentage of the loan repaid annually (typically 2–3%)
- Zinsbindung: Fixed-rate period — how long the interest rate is locked (typically 10–15 years in Germany)
Legal & Administrative Terms
- Auflassungsvormerkung: Priority notice — protects the buyer in the land registry between contract and final registration
- Teilungserklärung: Declaration of division — defines ownership shares in a multi-unit building
- Wohnungseigentümergemeinschaft (WEG): Homeowners' association — manages shared spaces in apartment buildings
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