Minimum income to buy property in Munich area

30 posts in this topic

I would like to ask what can I realistically expect when buying property in/around Munich. Consider the following scenario:

 

- Family of 4 looking for an apartment or (preferably) a house ~ 120m^2 or more

- Living in a small village around Munich is fine as long as it's possible to commute to Munich by train. Commute possibly not on a daily basis depending on job.

- Parents are foreigners and newcomers to Germany, both with PhDs in STEM fields

 

I used an online mortgage calculator and entered the following data:

- Kaufpreis: 750.000 €

- Eigenkapital: 150.000 €

- Tilgungssatz: 2%

- Wohnort: Augsburg

 

and the calculated monthly payment for mortgage is cca € 2000 - 2200 depending on further details such as the length of the period during which the interest rate remains fixed.

 

My question:

- do the numbers seem to be even remotely correct (house prices around Munich as seen on ImmoScout24 for example, the actual monthly payment etc.)

- would a German bank consider such a loan or would they be reluctant to lend this much money

- what minimum net monthly income would be needed (for the entire family). My rough guess would be at least €5000.

- I'd expect parents' salaries in the range €60000 - €90000 (gross/year/person)

 

I understand that there are many variables in the equation and giving a single answer is impossible. I'm just expecting a correction in case the numbers are completely off.

 

Also, let's assume that the question on whether it's at all reasonable to buy anything in the Munich area is for a separate discussion.

 

Thank you.

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11 hours ago, WallE said:

 

- Parents are foreigners and newcomers to Germany, both with PhDs in STEM fields

 

I used an online mortgage calculator and entered the following data:

- Kaufpreis: 750.000 €

- Eigenkapital: 150.000 €

- Tilgungssatz: 2%

- Wohnort: Augsburg

 

and the calculated monthly payment for mortgage is cca € 2000 - 2200 depending on further details such as the length of the period during which the interest rate remains fixed.

 

My question:

- do the numbers seem to be even remotely correct (house prices around Munich as seen on ImmoScout24 for example, the actual monthly payment etc.)

Mortgage payment rate with 2% starting Tilgungsatz looks correct. Regarding the house price, I am not sure.

 

 

11 hours ago, WallE said:

- would a German bank consider such a loan or would they be reluctant to lend this much money

They will provided if the main earner have permanent resident permit and have a stable job for past few years. If both spouse's  income need to be considered by the bank for the rate calculation, then both of them should have a permanent Resident permit. 

 

11 hours ago, WallE said:

- what minimum net monthly income would be needed (for the entire family). My rough guess would be at least €5000.

- I'd expect parents' salaries in the range €60000 - €90000 (gross/year/person)

Your estimate is right. For a monthly mortgage payment of 2000, you should be able to show that your monthly nett salary is atleast 4500 and above. Kindergeld will also be added by the bank's as income. The more you show, better the prospect to get low interest mortgage. 

Bank need to see that after mortgage + nebenkost deduction, you have decent amount of cash left for your monthly expenditure. 

 

 

11 hours ago, WallE said:

 

I understand that there are many variables in the equation and giving a single answer is impossible. I'm just expecting a correction in case the numbers are completely off.

I would suggest you visit the neighbouring Sparkasse /bank for a mortgage Termine to see how much loan they can offer for your situation. Then take that as a base and start. 

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your numbers look very realistic and doable to me - if you can find a bank willing to work with you. 

 

You should at least have job(s) with the probation period over, and long-term (preferably indefinite) residence permit(s).

Talk to your local Sparkasse, or Raiffeisenbank. 

 

My husband and I (he is US-citizen, I am dual national German/US-citizen) moved to Germany from the US September 2019, started working October 2019 - probationary period til end of March. We had trouble finding the necessary 100% financing at first - they all said "come back end of March, when your probation ends".

 

Our house is 26 km outside of Munich, within S-Bahn reach, and we paid a little more than your target 750.000,- € (but we also have way more space than what you're looking for with 284 m² total, 56m² of which are a nice little Einliegerwohnung so that our tenant helps pay the mortgage).

 

Good luck!

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I am not sure what kind of visa your parents will be on but friends of mine without permanent residency just had extreme difficulty getting a mortgage.

 

She is German earning close to 3700 net, he was non-EU with a working visa (here now for four years) earning closer to 5000 net. Interhyp and their local savings bank initially said it would be no problem lending to them despite one person not having permanent work visa as he was due to receive it later in the year. When it came down to the line, the bank would not lend to him as he does not have a permanent working visa. The bank in the end would loan to her only, and would not even consider the non-permanent resident. They are not married which likely played into the equation as well.

 

So, I think as a first step you should check their visa status and if a bank would lend to them. My understanding is that it is a well known problem that banks are very reluctant to lend, even to high earners working in good fields, unless they have permanent residency. You may need to go via a broker who can find lending solutions for foreigners.

 

The numbers also look realistic. The only thing which may not be realistic is a 120m flat/house for 750k in Munich, but as you say that it is separate discussion

 

Good luck! 

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If you really expect such salaries, then you have to question yourself if you should point to something more expensive. 2x60k pays that house comfortably. Anything above, you can either pay it sooner or aim higher.

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In my hood in Munich, Westend, fairly new 3-room appartments with 70m2 were offered for €740.000 some years ago. Wouldn't be surprised if they ask >€800K now. At Bavariaring, completely new 2-room appartments with 56 m2 were on sale for €670K last year. View at the Bierstrasse during the Wiesn' included :).

 

PS- Today, I watched a program about big houses at nice suburbs of Knoxville, Tennessee. €250K gets you 4 bedrooms, 2.5 bathrooms, large kitchen and a garage for 2 cars. 280 m2 living space. Hilarious prices. I saw once a tiny studio of 25 m2 with fitted kitchen in Maxvorstadt for that kind of money.

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The salaries are perfectly normal for a couple PhDs in STEM fields, I sure hope  they’re significantly above €60,000/year unless they have zero work experience, and even in that case they’d start at or above €75,000 where I work.

 

I see the Eigenkapital as the problem here. Of the €150,000 around €60,000 will be left after paying the Nebenkosten. That’s not much  money to convince the banks to lend to you at a top rate.

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6 minutes ago, LukeSkywalker said:

, I watched a program about big houses at nice suburbs of Knoxville, Tennessee. €250K gets you 4 bedrooms, 2.5 bathrooms, large kitchen and a garage for 2 cars. 280 m2 living space. Hilarious prices. I saw once a tiny studio of 25 m2 with fitted kitchen in Maxvorstadt for that kind of money.

It's all about location.. 

With that kind of money one can't even buy a parking space. 

https://www.thesun.co.uk/news/uknews/13812709/uks-most-expensive-parking-space-costs-350000/

 

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23 minutes ago, mtbiking said:

The salaries are perfectly normal for a couple PhDs in STEM fields, I sure hope  they’re significantly above €60,000/year

 

Does speciality matter? Is the job market in Munich for PhDs in STEM fields so good that even those with PhDs in specialisations not needed in Munich able to find positions in other disciplines? 

 

 

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15 minutes ago, mtbiking said:

I see the Eigenkapital as the problem here. Of the €150,000 around €60,000 will be left after paying the Nebenkosten. That’s not much  money to convince the banks to lend to you at a top rate.

As my bank explained it to me, if they repo the house then by law they can sell it for 80% of the value. Therefore any borrowing over that 80% they consider unsecured and will have correspondingly high rates of interest.

 

You can play around with various factors to reduce it to the magic 80% as quickly as possible ... more eigenkapital, higher monthly payment (tilgung) or regular additional payments (sondertilgung). 

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47 minutes ago, penchanski said:

if they repo the house then by law they can sell it for 80% of the value.

 

Why would they do that?

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1 hour ago, engelchen said:

 

Does speciality matter? Is the job market in Munich for PhDs in STEM fields so good that even those with PhDs in specialisations not needed in Munich able to find positions in other disciplines? 

 

 


speciality matters and some PhDs (including very theoretical people who didn’t manage in academia, with little work experience, over thirty) are almost unemployable, but they‘re coming here with a job in their pocket, which from the salary involved is likely in the industry, so it doesn’t apply. 
 

IT pays more, I’ve seen PhDs starting their first job in Munich at Microsoft and alike with salaries well above €100,000.

 

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3 minutes ago, mtbiking said:


speciality matters and some PhDs (including very theoretical people who didn’t manage in academia, with little work experience, over thirty) are almost unemployable,

 

This is a problem faced by many foreign grads in Berlin, I was wondering if I could just send them all to you for jobs :)

 

3 minutes ago, mtbiking said:

but they‘re coming here with a job in their pocket, which from the salary involved is likely in the industry, so it doesn’t apply. 
 

 

Read the OP again. I could be totally wrong here, I understood that they have the PhDs, but want to know how much they'll need to earn for the housing they want to have. 

 

@WallE do you both already have jobs lined up? Or you basing your decision to consider Munich on whether or not you'll be able to afford to buy property? 

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Houses in the US are often flimsy by our European standards, lots of wood but not 'massiv' as we know it.

 

I should not like to have to commute by train from A to M daily for years or decades. Better to pay even a bit more to live near work.

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2 minutes ago, Fietsrad said:

Houses in the US are often flimsy by our European standards

 

And yet 2 or 3 or 4 generations if not more live in them.

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1 hour ago, fraufruit said:

 

Why would they do that?

Due to auction law of germany . Bank is obliged to accept bids 80% and above.

 

There is one outlier I have witnessed. Bank was able to decline bids under certain threshold.

Threshold was above 80%. I am not sure which specific law clause was used.

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OK. I get it now. The property may have already been paid off a lot and therefore, 80% could still bring a profit to the bank or they could break even.

 

Sounds like foreclosures in the US.

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1 hour ago, engelchen said:

Read the OP again. I could be totally wrong here, I understood that they have the PhDs, but want to know how much they'll need to earn for the housing they want to have. 

 

@WallE do you both already have jobs lined up? Or you basing your decision to consider Munich on whether or not you'll be able to afford to buy property? 


you’re right, I misread the OP. It’s not clear whether they have job offers or not. 

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8 hours ago, MikeMelga said:

If you really expect such salaries, then you have to question yourself if you should point to something more expensive. 2x60k pays that house comfortably. Anything above, you can either pay it sooner or aim higher.

 

I guess you are being sarcastic :D 

 

120k gross/year is not something that let you aim to >750k properties that easily.

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