In Housing in Stuttgart

How to buy a property and get a mortgage in Stuttgart

Mortgage in Stuttgart with

As I know that finding a home in Stuttgart is a huge topic for many of you, I’ve teamed up with LoanLink, Germany’s first certified digital mortgage broker. Find out more about the housing situation in Germany and how to get a mortgage in Stuttgart in the following post.

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Even though Germany is the largest economy within the European Union, it still has some of the most affordable housing anywhere in Europe. With all of this interest in living and working in Germany, many cities across the country are growing.

With 5.3 million people in the metropolitan area, Stuttgart is just one of the cities that is enjoying a steady and strong growth trajectory. Visitors to Germany often view Stuttgart as the “cradle of the automobile industry” as it is home to world famous brands such as Porsche, Mercedes-Benz, and Daimler AG. But that’s not all – Stuttgart is also home to major multinationals including Bosch, IBM, and Holtzbrinck Publishing Group (owner of popular imprints including Palgrave Macmillan). In fact, the city and its metropolitan area are consistently ranked among the top 20 European metro areas by GDP.

Stuttgart is unusual for a major German city in that its spread cross hills, valleys and parks. It’s this natural beauty, combined with the city’s strategic importance, that makes it a popular destination for expats to live and work. Add in the fact that Germany’s property market offers a strong return on investment, more expats are buying their homes in this capital of Baden-Württemberg.

Stuttgart property values are on the rise:

Home values have been rising across Germany over the last decade. According to Deutsche Bank Research, prices have risen by 60 percent in some cities. The graph below shows the property price changes in various major German cities between 2008 and 2018. It is clear that Stuttgart ranks comfortably as one of the top cities for property returns. While Munich remains the most expensive city to buy a home, Stuttgart remains relatively affordable compared to others, while still offering a solid return.

Apartment asking prices Stuttgart - Loanlink
Source: Statista and TheLocal 2018

Buy-to-Let in Stuttgart:

Property values and rents in the Stuttgart area continue to increase due in part to real estate that offers the city’s natural beauty and panoramic locations. During the first half of 2018, the average asking rent increased by 6.3 percent from last year to its current level of €14.40/sqm/month according to a research published by JLL. In the city’s central districts, rent for the most prime locations has reached €25.30/sqm/month. If you’re interested in buy-to-let, it’s worth noting that landlords can deduct mortgage interest from rental income taxes as a business expense. Learn more about property prices in Stuttgart.

Morgage in Stuttgart with loanlink - apartment rental prices
Source: Statista and TheLocal 2018

How to evaluate your property purchasing potential in Germany:

While buying a residential home or investment property seems to be an astute financial decision, the problem with buying property in Germany is that the process is often overwhelming for non-natives. To help get the process started, let’s take a closer look at how to mortgage a home in Stuttgart and the rest of Germany.

Mortgage repayment calculator:

Before beginning to look for your dream home, it is useful to find out what your monthly repayments might look like so you can avoid being disappointed. Online mortgage calculators help buyers evaluate, for example, how much they can borrow and estimate monthly payments. They can give you an idea of what your future home in Germany could cost. With a mortgage repayment calculator, you’ll know in advance how much a house will cost per month and if your budget is enough to afford the property you want to purchase.

Mortgage in Stuttgart with loanlink - calculation results
Source: LoanLink

German mortgage interest rates:

Interest rates in Germany have decreased by more than 4 percent over the last decade. This means the current market conditions make it an ideal time to finance a home. Securing the best rate depends on a variety of factors. Not only does a mortgage rate calculator show you the latest interest rates, but it also helps walk you through the factors that can impact the rate banks will offer you. Variables considered include:

  • Down payment: a bigger down payment is more likely to yield a lower interest rate
  • Borrowing amount: higher borrowing amounts usually result in a higher rate
  • Fixed rate period: a longer fixed interest period, ex. 5 vs. 10 years, usually results in a higher interest rate

Mortgage in Stuttgart with loanlink - rates
Source: LoanLink

How to find a mortgage broker in Germany:

And finally, as you look for your dream home or buy-to-let investment in Stuttgart, you’ll want to find a mortgage broker to help you manage the process. There are more than 400 lenders offering mortgages in Germany. A broker compares all rates and manages your application from start to finish, saving you time and money.

Buyers also don’t need to worry about an expensive up-front fee for this service because it’s customary for all mortgage brokers in Germany to be paid a commission from the chosen lender once the mortgage contract has been executed. This commission typically ranges from 0.5 to 2 percent of the loan’s value, but it can be higher in some circumstances.

Recognizing the language barrier can be a challenge (e.g. the deed and house mortgage contract must be executed in German by law), there are a growing number of brokers who specialize in assisting international property investors and expats search for mortgages. For example, LoanLink, Germany’s first certified digital mortgage broker, offers an online platform available 24/7, in English, that helps buyers apply for pre-approvals and full mortgages. The company’s advisors can provide assistance in English, German, Chinese and Russian.

Exploring options with a mortgage expert can help ensure that you receive a bespoke solution. Being well-informed about the estimated total cost and financing options can take some of the stress out of buying a home.


Photo credit featured picture: Pixbay


Hello and welcome to "living in Stuttgart". I am Mel and I love this beautiful city. There are so many things to explore, I can't wait sharing them with you. So come along and let me show you Stuttgart the way I see it.

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