Eigenkapital (down payment) is the cash you bring to purchase a property. In Germany, banks require substantial equity—not just for the property price, but also to cover closing costs.
How Much Do You Need?
German banks typically require:
- 10-30% of purchase price as down payment
- Plus 10-15% for closing costs (notary, property transfer tax, land registry)
Real Example
€450,000 Property Purchase:
- Purchase price:€450,000
- Down payment (20%):€90,000
- Property transfer tax (5%):€22,500
- Notary & land registry:€9,000
- Total cash needed:€121,500
Why So Much Equity?
- Risk management: German banks are conservative and want borrowers to have "skin in the game"
- Closing costs aren't financed: Unlike some countries, you can't add closing costs to the mortgage
- Better rates: Higher equity (30%+) gets you lower interest rates
The 110% Financing Myth
Some banks advertise "110% financing" but it's rare and expensive. Expect 5-6% interest rates vs. 4% with 20% down. For most investors, it's not worth it.