Bank loans for apartment rental deposits

How do all!

New to the board and about to be new to Frankfurt. Only taken me two years to get here but I suppose the wait will have been worth it!

Few quick questions about rent. I know some of this has been covered before but I just need some clarification. When it comes to deposits I've heard something mentioned that your bank will guarantee your deposit to the landlord without taking any money from yourself. Is this right?

I'm staying on a friends sofa for a couple of months just to get the deposit together but if the bank will do that, then I can sort myself out with something earlier.

They have special deposit accounts where you deposit the required amount. You and the landlord sign the contract with the bank and deal is you only get your money back when he agrees and he only get's the money if you agree so.

Hiya and thanks for that.

Actually think I've asked the wrong question. Someone told me that I can get a special loan as long as my credit is good with the bank that would pay for the deposit. Apparently there's a special name for it but for the life of me I can't remember.

I know everybody is thinking it's just called "loan", but I'm lead to believe that there is something special the banks setup for this.

They'll want to see your income reguarly before you get any decent sized credit.

You're referring to a Burgschaft - and it costs much more than it's worth - especially if you want to live in a place for more than a couple months.

I had a Burgschaft through my company for my flat caution when I first came to Germany. This was approx. 2 years ago.

Now I want to move flat. Im moving into another flat (Larger) in the same building with the same landlord.

I thought I could save some money etc when I found out there was a flat free in the same building. Turns out I was wrong.

It seems a Burgschaft is tied to a particular flat and cannot be transferred, even when moving to a flat with the same landlord etc.

So either I pay alot of money for the Caution or I find another Burgschaft.

Does anyone know about how to apply for one privately, it seems my company only provide a Burgschaft for people initially moving to Germany.

Do you have to pay for a Burgschaft? Is it expensive, Is this why it not worth the effort to get one?

Trying to get more info from the banks etc now, but my Sparkasse for example said they dont do many because it can be quite expensive.

I can't remember the exact numbers, but, to set up a Burgschaft, my bank charges something like a set-up fee and an annual maintenance fee, and, I think, though my memory could be playing tricks on me, it was working out at somewhere around €200-€300 p.a. for me. The teller instead encouraged me to set up one of those joint deposit accounts.

Also make sure that your landlord will accept this. They are under no obligation to do so apparently and can insist on cash.

So a Burgschaft is practically a small loan from a Bank and comes with a relatively high interest rate e.g. 7-8%.

Its not worth paying 200-300 Euros a year for one, unless you really do have no money and need somewhere to live now!

Speaking with my company and asking them about the possibility of getting the Burgschaft transferred to the new flat, so wait and see.

Otherwise will have to pay the hard cash into this joint bank account mentioned above.

Hi all

First post and all that, sorry to be dragging up an old thread but just wanted to see if anyone else had anything to add to this. I'll be moving to Düsseldorf in August and was over this weekend looking at accommodation. Have decided on a nice apartment and this morning sent a copy of my passport and a filled out and signed Selbstauskunft to the estate agent. I've spent the last few weeks trawling ImmoScout and noticed that sometimes it said you can put the Kaution money in an account (verzinst auf einem Sparbuch legen is the term I think) but on the form I got today the only choices were Überweisung or Bankbürgschaft. A quick phone call to a friend in Frankfurt (Irish but living there for 12 years) made me think that a Burgschaft was essentially the same as the Sparbuch except you might not need to actually pay over the money. Reading the above it would make sense that there is a charge for this but as I'm planning on the move being permanent it sounds like it may not be such a good idea.

Any further tips on this much appreciated. I have lived in Germany before but never had my own apartment, just rented a room (bedsit really) so didn't have the same things to deal with.

Thanks a lot.

J.

The Bankbürgschaft costs 2.5% of the amount per annum (if I recall correctly). It can be difficult to obtain such a security if you have not been banking with your bank for very long. The bank generally requests a Gehaltsabtretung (assignment of your salary) as a security for this guarantee.

If payment from the bank guarantee is required the bank can garnish your pay until the debt is repaid.

If the landlord requests a transfer then you must insist on proof that the funds are being invested in an interest-bearing account. You set up a savings account which you then assign to the landlord providing that both parties agree to any payment being issued. The accrued interest must be credited to your name, you will receive an annual statement from the bank.

My landlord (house management, actually) insisted that the savings account was opened with their bank who also holds the book. I went there and paid cash into the savings account, the landlord never saw the money. All shipshape and aboveboard.