Living in small spaces is also becoming increasingly fashionable in Germany. Even if the German building law still puts some stumbling blocks in the way, Tiny houses are becoming more and more popular. In the meantime, banks have also caught on to this trend and are offering comparatively inexpensive and uncomplicated financing for mini-homes (with and without land charge registration).
Photo (original image): Shutterstock/inrainbows
Financing a Tiny house is a bit complicated. If it is a mobile Tiny house and/or it is built on a rented resp. If the property is leased, it does not constitute security for a loan from the banks' point of view. Thus, the financing of the Tiny house falls into the category of installment loan, that is, a loan without collateral other than the personal creditworthiness of the or. The Borrower. Such installment loans are significantly more expensive than real estate financing and have only a comparatively low maturity with correspondingly high repayment rates.
One of our bank partners, for example, offers a "middle ground" between real estate financing and installment credit. Typically for the installment loan it needs no security over a land charge (the personal creditworthiness is enough). On the other hand, longer loan terms with low interest and repayment rates (compared to a traditional installment loan) are typical for construction financing.
General conditions
- Minimum loan amount 10.000 Euro up to a maximum of 60.000 Euro
- for employees, civil servants and pensioners/retirees (not for self-employed)
- Debit interest rate fixed for 10 years
- Minimum repayment rate 2% p.a. (results in a total term of approx. 35 years)
Financing example (here for a 10-year total term!):
- Loan amount 60.000 with a monthly installment of Euro 578 Euro
- Debit interest rate 3.15% (3.20% effective) with a 10-year fixed rate (subject to change; as of 03.03.2020)
Assumptions: Contract term 10 years, net loan amount 60.000 euros, repayment 8.53% p.a., monthly installment 584 euros, 120 installments (last installment is 503.19 euros), total amount 69.999,19 Euro, 3,15 % bound debit interest rate p.a., APR 3.20%, total term 10 years (interest subject to change, as of 03.03.2020).
In addition to this financing option, we can also offer you other financing options, for example, with land register security on any property. We can also offer self-employed people various financing options for a Tiny house.
Feel free to use our sog. Online request to contact us. We will then contact you to discuss your financing options (free of charge and without obligation).
NDR report on the topic of "Tiny-House"