These government-backed options directly impact how much you can afford, reducing interest payments and monthly costs. Using KfW loans, you can save thousands in interest, making your dream home more accessible. Whether you’re a first-time buyer or looking to improve your property’s energy efficiency, the bottom line is simple: KfW loans can significantly impact your budget.
Why KfW?
KfW, short for Kreditanstalt für Wiederaufbau, is a German government-owned development bank. Originally founded to support economic growth, KfW now promotes home-ownership and sustainability by providing affordable financing and subsidies for energy-efficient homes.
Whether you’re a first-time buyer or upgrading your property, KfW programmes offer valuable financial support to make home-ownership in Germany a reality.
Overview of KfW subsidy programmes
Here is a handy overview of existing KfW subsidy programmes:
KfW 124 loan
Specifically designed for first-time own-use homebuyers, this programme offers loans of up to 100.000 euros. While the rates are not very attractive themselves, they help banks offer you lower rates, as the KfW loan reduces the risk for the banks. It can be an excellent option for expats looking to purchase their first property in Germany that they want to use for themselves.
KfW 297 & 298 energy-efficient loans
These programmes offer low-interest loans to buy or build new energy-efficient homes. You can use this both for investment and for own-use property.
With loans of up to 100.000 euros for normal climate-friendly homes and 150.000 euros for highly climate-friendly homes, these programmes incentivise sustainable living by reducing energy costs and the overall repayment burden. Homeowners can benefit from implicit subsidies of up to 30.000 euros, respectively 45.000 euros, making energy-efficient homes a more affordable option.
KfW 300 programme
This programme is for families with at least one child under 18 and offers low-interest loans for buying or building new own-use energy-efficient homes. The amounts depend on the number of children you have and the energy efficiency of the house.
With interest rates as low as 0,01%, it can save families 50.000 to 80.000 euros in interest payments, making it a very attractive option. However, properties must meet strict energy-efficiency standards to qualify, and the programme in practice mainly applies to new houses rather than apartments.
Key benefits of KfW programmes
KfW loans help you save on interest rates, making home-ownership and investment more affordable by lowering your monthly payments and effective costs. This is especially the case now with energy-friendly homes. For instance, with KfW 300, you can get rates as low as 0,01%, potentially saving up to 80.000 euros in interest over the term of your mortgage. Keep in mind that the most attractive loans are for relatively narrow circumstances.
Typically, the KfW loans have a fixed interest period of 10 years, so while your payments will be predictable during that time, you might face higher rates if you need follow-up financing once the fixed period ends. Sometimes, this means you, as a first-time home buyer, are better off without a KfW loan.
Eligibility for KfW programmes
KfW loans are available to German citizens and eligible expats, including those with Blue Cards and those with temporary or permanent residency. KfW does not have separate criteria for citizenship, but as you require a general mortgage loan, banks will apply their usual criteria.
For certain residence permits, this means you need to bring more capital. Tax foreigners - those not paying income tax in Germany but elsewhere - are generally not eligible. But as always, there are exceptions.
| KfW Programme |
Target group |
Requirements |
| KfW 124 |
First-time homebuyers |
None |
| KfW 297 & 298 |
Homeowners interested in sustainability |
Must meet strict energy standards |
| KfW 300 |
Families with at least one child under 18 |
Must meet strict energy efficiency standards and income has to be below certain limits |
How to apply for KfW programmes
Interested in one of the KfW programmes? Here is how you can apply:
- Consult a mortgage advisor: They’ll review your financial situation and home wishes and explain if the KfW programme works for you.
- Apply through your bank: You don’t apply directly to KfW. Instead, your KfW loan will be processed by your bank as part of your standard mortgage application. Nearly all German banks that offer mortgages cooperate with the KfW.
- Get approval and move forward: Once your mortgage, including the KfW loan, is approved, you can proceed with your home purchase or renovation.