Quick answer
With our Germany defaults (€450,000 home, €1,500 cold rent, 20% Eigenkapital, 3.6% fixed rate), renting and investing stays ahead for at least 20 years, about €65,000 ahead after 10. Buying costs of around 10%, slow price growth and a low rent-to-price ratio are the reasons. Buying wins mainly where rents are high relative to prices and you stay 15+ years.
How do you use the rent vs buy calculator for Germany?
On our German default numbers, renting and investing beats buying over 10 years by about €65,000, and buying still has not caught up after 20 years. That matches a long-standing pattern. About 58% of German households rent, and the Federal Statistical Office (Destatis) puts the home-ownership rate at just under 42% in 2022. Buying wins when you find a home with a high rent relative to its price, keep the purchase costs low, and stay for a long time.
This calculator answers the classic question mieten oder kaufen? with a monthly simulation. The buyer pays Eigenkapital and Kaufnebenkosten up front, then the loan instalment (Annuität), Grundsteuer, maintenance and insurance. The renter pays rent and invests both the money the buyer put into the purchase and any monthly saving. After selling costs, we compare the two net worth figures. See our methodology for the details.
What do our German defaults assume?
| Input | Default | Notes |
|---|---|---|
| Purchase price | €450,000 | An apartment or terraced house in a large city’s suburbs |
| Monthly rent | €1,500 | Kaltmiete for a comparable home |
| Eigenkapital (down payment) | 20% | Lenders’ best rates usually need 20%+ plus costs paid in cash |
| Interest rate | 3.6% | A long-run assumption for a fixed-rate Annuitätendarlehen |
| Term | 30 years | Assumes you refinance (Anschlussfinanzierung) after the fixed period |
| Buying costs | 10% | Grunderwerbsteuer, notary, Grundbuch and broker share |
| Selling costs | 3% | Seller’s broker share and minor fees |
| Grundsteuer | 0.2% | Annual property tax (around €900 here) |
| Maintenance | 1% | Instandhaltung, including your share of the Erhaltungsrücklage |
| Insurance | 0.1% | Wohngebäudeversicherung |
| Appreciation | 2% | Moderate long-run growth |
| Rent growth | 3% | Higher in tight markets, lower under the rent brake |
| Investment return | 6% | A diversified ETF portfolio after Abgeltungsteuer |
One important update: in October 2026, 10-year fixed mortgage rates were around 4.4% according to Interhyp’s rate charts and the Biallo index. That is noticeably above our 3.6% default. If you are buying now, enter your actual offer.
Worked example: €450,000 purchase vs €1,500 Kaltmiete
Upfront cash: €90,000 Eigenkapital plus €45,000 Kaufnebenkosten, or €135,000 in total. German banks rarely lend the purchase costs, so this all comes from savings.
Monthly Annuität: the loan is €360,000 at 3.6% over 30 years. Using the amortisation formula, M = P × r ÷ (1 − (1 + r)^−n), with r = 0.036 ÷ 12 and n = 360, the payment is about €1,637 a month. That works out to an initial Tilgung (repayment rate) of about 1.86% a year. In month one, €1,080 is interest and €557 repays principal.
Total monthly cost of owning in year 1: about €2,124 (€1,637 loan, about €488 for Grundsteuer, maintenance and insurance). The renter pays €1,500 and invests the €624 difference each month, as well as the €135,000 that never went into the purchase.
After 10 years:
- Buyer: home worth about €548,500, minus 3% selling costs and a remaining loan of about €279,700. That leaves a net worth of around €252,000.
- Renter: an investment portfolio of around €317,000.
- Renter ahead by about €65,000. The break-even year is not reached within 10 years, or even within 20 years on these inputs.
- Break-even rent: about €1,850 a month. If a comparable home rents for more than that, buying starts to win over 10 years.
The 5% rule gives €450,000 × 5% ÷ 12 = €1,875, almost the same as our full break-even rent. It points the same way: at €1,500, renting is the cheaper way to live in this home. Our 5% rule calculator runs the quick version.
At today’s 4.4%: the Annuität rises to about €1,803 a month, and the renter’s lead after 10 years grows to roughly €100,000.
What are the Kaufnebenkosten when buying in Germany?
The transfer tax is set by each federal state, which is why the same home can cost €13,000 more in one state than in another.
| Bundesland | Grunderwerbsteuer |
|---|---|
| Bayern | 3.5% |
| Baden-Württemberg, Niedersachsen, Rheinland-Pfalz, Sachsen-Anhalt, Thüringen | 5.0% |
| Hamburg, Sachsen, Bremen | 5.5% |
| Berlin, Hessen, Mecklenburg-Vorpommern | 6.0% |
| Brandenburg, Nordrhein-Westfalen, Saarland, Schleswig-Holstein | 6.5% |
Rates as of late 2026. Thüringen cut its rate to 5.0% in 2024, Bremen raised its rate to 5.5% from July 2025, and Sachsen and Hamburg have charged 5.5% since 2023.
On a €450,000 purchase, the full set of costs looks like this:
| Cost item | Typical rate | Bavaria | Berlin | NRW |
|---|---|---|---|---|
| Grunderwerbsteuer | 3.5–6.5% | €15,750 | €27,000 | €29,250 |
| Notary and Grundbuch (land registry) | ~1.5–2% | €9,000 | €9,000 | €9,000 |
| Maklerprovision (buyer share) | up to ~3.57% | €16,065 | €16,065 | €16,065 |
| Total | €40,815 (9.1%) | €52,065 (11.6%) | €54,315 (12.1%) |
The broker rule since December 2020: when a private buyer purchases a house or apartment and both sides owe commission, the buyer cannot be made to pay more than the seller (§ 656c BGB). In practice, the commission is often split evenly, at about 3.57% each including VAT. If the seller hires the broker alone, the seller can pass on at most half the fee. Buying without a broker, for example in a private sale, saves the whole share, so try 6–7% in buying costs.
How do German mortgages work?
- Zinsbindung (fixed-rate period). Most loans fix the rate for 10, 15 or 20 years. After that you refinance at whatever the market rate is. The calculator uses one rate for the whole term, so if you fix for 10 years and your horizon is 15, test a higher rate.
- Right to repay after 10 years. Under § 489 BGB, a borrower can terminate a fixed-rate loan 10 years after full payout, with six months’ notice and no early-repayment penalty. This makes 15–20-year fixes less risky.
- Tilgung (repayment rate). Lenders often suggest 2–3% initial repayment. A higher Tilgung shortens the loan and cuts total interest, which the calculator shows if you reduce the term.
- Eigenkapital. Many banks lend up to 100% of the price, but the best rates need 20% or more down, plus the Kaufnebenkosten paid in cash.
- KfW loans. The state development bank offers subsidised loans for some buyers, especially families and energy-efficient new builds. Enter a blended rate if you use one.
What taxes and rules apply to German owners and renters?
- Grundsteuer reform 2025. Since 1 January 2025, property tax is based on new assessed values following the Constitutional Court’s 2018 ruling. States use different models, so some owners pay more than before and others pay less. Check your Grundsteuerbescheid and enter the actual amount as a percentage of the price.
- No mortgage interest deduction for owner-occupied homes.
- Capital gains on sale. Profits are tax-free if you lived in the home yourself in the year of sale and the two years before, or held it for over 10 years. The calculator does not model this tax, which is correct for most owner-occupiers.
- Mietpreisbremse. In tight housing markets designated by the states, rent on a new lease is generally limited to about 10% above the local comparative rent. The Bundestag extended the rent brake until the end of 2029, as reported by Legal Tribune Online. Rent rises for existing tenants are also capped (Kappungsgrenze), typically 15–20% over three years.
- Strong tenant protection. Open-ended leases and limits on termination make long-term renting secure, which is a big reason Germany’s ownership rate is so low.
How do inputs change across German cities?
| City | How to adjust the inputs |
|---|---|
| Munich | Prices often far above €450,000 for the same space, with low rental yields. Bavaria’s 3.5% Grunderwerbsteuer lowers buying costs to about 9%. Try a price of €900,000 against €2,300 rent and renting wins clearly. |
| Berlin | 6% transfer tax pushes buying costs to about 11.5%. The rent brake applies and many sitting tenants pay well below new-lease rents. If your rent is old and low, renting is hard to beat. |
| Hamburg | 5.5% Grunderwerbsteuer and high prices. Use buying costs of about 11% and check the Hausgeld carefully for older buildings. |
| Frankfurt and Cologne/Düsseldorf | Hessen (6%) and NRW (6.5%) are among the most expensive states for transfer tax. Use 11.5–12% in buying costs. |
| Leipzig and Dresden | Lower prices and rents, but Sachsen’s 5.5% tax still applies. Rent-to-price ratios are often better than in Munich, so buying can win over longer horizons. |
Outside the major cities, prices are often lower relative to rents. That is where buying in Germany most often comes out ahead.
When does renting win in Germany, and when does buying win?
Renting tends to win when:
- the purchase price is more than about 25–30 times the annual Kaltmiete
- you might move within 10 years and lose the 9–12% Kaufnebenkosten
- you have a long-standing lease below today’s market rent
- you would be paying a refinancing rate well above your current fixed rate
Buying tends to win when:
- comparable rent is above the break-even rent (about €1,850 on our defaults)
- you buy in a low-tax state such as Bavaria, or without a broker
- you will stay 15–20 years or longer and want protection from rent increases
- you lock a long Zinsbindung at a rate you can comfortably afford
For the investing side of the comparison, read renting and investing vs buying a house. For a full list of the costs owners forget, see the hidden costs of owning a home.
Mieten oder kaufen: a checklist for Germany
- Find the Grunderwerbsteuer for your Bundesland and add notary (about 2%) and the buyer’s broker share.
- Compare cold rent with cold rent. Leave out heating and utilities on both sides.
- Get the Hausgeld breakdown for an apartment, and enter the non-recoverable part as the monthly owner fee.
- Check the Erhaltungsrücklage and any upcoming special assessments (Sonderumlagen).
- Use your real offer rate, and test it 1 percentage point higher for the Anschlussfinanzierung.
- Enter your new Grundsteuer from the post-2025 assessment notice.
- Set a realistic horizon. If it is under 10 years, renting usually wins.
- Read the break-even rent and compare it with what a similar home rents for today.
This calculator gives estimates based on your inputs, not financial advice. To compare Germany with other countries, see the all-countries calculator hub or our guide to the price-to-rent ratio.
Frequently asked questions
Is it better to rent or buy in Germany?
On our default numbers, renting and investing wins over 10 and 20 years. Purchase costs of 9–12%, modest house-price growth and strong tenant protection all favour renting. Buying makes more sense when you find a home whose price is under about 25 times the annual cold rent, you stay for decades, and you value security of tenure.
What are Kaufnebenkosten in Germany?
Kaufnebenkosten are the extra purchase costs on top of the price: Grunderwerbsteuer (3.5% to 6.5% depending on the state), notary and land-registry fees of roughly 1.5–2%, and a broker's commission, usually up to about 3.57% for the buyer. They typically total 9–12% and you cannot borrow most of them cheaply.
Should I use cold rent or warm rent in the calculator?
Use Kaltmiete plus only the service charges an owner would not pay. Heating, water and waste charges are paid by both owners and renters, so leave them out of both sides. If you buy an apartment, enter the non-recoverable part of the Hausgeld as the monthly owner fee.
What mortgage rate should I enter for Germany?
Enter the rate for your Zinsbindung. In October 2026, 10-year fixed rates were around 4.4% according to rate indices from Interhyp and Biallo, above our 3.6% default. Our default reflects a long-run assumption. If you are buying now, enter your actual offer.
Does the Mietpreisbremse affect the rent vs buy decision?
Yes. The rent brake, extended by the Bundestag until the end of 2029, limits rent on new leases in designated tight markets to roughly 10% above the local comparative rent. Lower rent growth for sitting tenants makes renting more attractive, so consider a rent-growth input below our 3% default if your lease is covered.
Can I deduct mortgage interest on a home I live in?
No. In Germany, interest on a loan for an owner-occupied home is not tax-deductible, so the calculator's no-deduction approach matches German rules for owner-occupiers. Capital gains on a home you have lived in yourself are generally tax-free when you sell.