If you want to buy your house in Austria, you have to dig deep into your pockets. Since the summer, there have also been stricter rules for granting home loans. As a result, people looking for accommodation are increasingly turning to Germany. Loan is easier there.
AUSTRIA. In the summer, the rules for granting home loans were significantly tightened. If you want to buy a property now, you need to be in good financial shape. Home loans now have a maximum term of 35 years, at least 20 per cent of the costs must be paid from own funds and the mortgage repayment rate cannot exceed 40 per cent of the household income. Exceptions are only rarely granted.
German loans aren’t cheaper
In Germany, home loans are no cheaper than here, but they are easier to finance. Austrians are therefore moving more and more to neighboring countries. From a purely legal point of view, it makes no difference whether the property is secured with a loan from Austria or Germany, confirms the Chamber of Commerce. It is only important that the means of payment is money from EU or EEA countries, i.e. countries of the European Economic Area.
Interim financing as an obstacle
One plus point for German loans is the maximum in debt service ratio. Unlike in Austria, this can be up to 60 percent of household income. Also, our neighbors have no restrictions on interim financing. In this country, however, these short-term loans are added to the loan amount. Another advantage is that there are no language barriers.
Processing takes longer in Germany
Besides many benefits, there are also some things to consider. Continued support is much more difficult with a loan from Germany. Furthermore, processing often takes much longer because German suppliers are often unfamiliar with the Austrian market. Germany is also much stricter on its lending criteria. So far, the number of Austrians taking out a home loan in Germany has been limited, as confirmed by Andreas Ederer of the credit comparison platform Durchblicker.
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