Found a new flat? Congratulations! But now the serious part begins: the financing. Here you can find out which aspects you need to consider on the way to owning your own home. Keep an eye on costs In addition to the purchase price of the flat, don't forget the often underestimated additional costs, which add up to 10 to 15 per cent of the purchase price. They include:

• Land transfer tax: This is between 3.5 and 6.5 per cent of the purchase price, depending on the federal state.

• Notary fees: These amount to around 1.5 per cent of the purchase price.

• Land register entry: This costs around 0.5 per cent of the purchase price.

• Estate agent fees: These vary between 3.0 and 7.0 per cent of the purchase price.

Equity - the cornerstone for solid financing

Equity is a decisive factor for favourable bank lending conditions. The more of it you contribute, the better the conditions. Only in rare cases is the property purchased entirely with your own capital. Banks recommend at least 20 per cent of the purchase price as equity. This can come from savings, securities or the sale of assets. It is important that you still have a financial buffer for unexpected expenses after the purchase.

Property loan - the most common form of financing

The most common form of financing is an annuity loan, where a constant monthly instalment is paid. It is made up of interest and repayment instalments. The interest portion is higher at the beginning, while the amortisation portion increases over time. This makes financial planning easier, as the instalment remains the same over the entire term. An important point is the fixed interest rate. Interest rates are normally fixed for five, ten or fifteen years. If interest rates are low, it is advisable to choose a long fixed interest rate in order to protect yourself against future interest rate increases.

Other financing models when buying a home

In addition to the annuity loan, there are other financing models, although these are used less frequently. Two examples are the amortising loan and the bullet loan. With amortising loans, the interest payments fall over time as the remaining debt continuously decreases. With a bullet loan, on the other hand, you only pay the interest during the term and the repayment is made in a single, larger payment at the end of the term. These models have specific advantages and disadvantages and generally only make sense for special financial situations. For example, the bullet loan could be of interest to someone who is expecting a large payout in the near future, such as an inheritance.

Special repayments - flexibility in repayment

Many loan agreements offer the option of unscheduled repayments. This means that you can make additional payments on top of the regular instalments to pay off your debt more quickly. This can be particularly useful if you receive a salary increase or an inheritance. Make sure that your loan agreement allows for flexible unscheduled repayments at no extra cost. However, calculate in advance how these unscheduled repayments will affect the total term and interest costs of your loan. Example: If you repay an additional 5,000 euros a year, you can shorten the loan term by several years and save considerable interest.

Subsidy programmes and low-interest loans in 2024

Various subsidy programmes are also available in 2024 to support the purchase of a home. The Kreditanstalt für Wiederaufbau (KfW) in particular offers low-interest loans. One popular programme is the KfW Home Ownership Programme, which provides low-interest loans of up to €100,000 for property purchases.

Repayment calculator and financing planning

To find the best financing solution for your condominium, you should definitely use a repayment calculator. Such tools allow you to run through various scenarios and find out what monthly repayments you can afford. You can also calculate how unscheduled repayments or a shortened term will affect the total cost of the loan.

Conclusion: Thorough planning is crucial

Buying a condominium requires well thought-out financial planning. It is important to keep an eye on all costs, bring in sufficient equity and select the right type of loan. Seek professional advice to find the best financing solution for your home purchase. Personalised advice from a financial expert can help you avoid pitfalls and find a solution tailored to your needs. This will help you realise your dream of living in your own four walls.