KfW Loans 2025: Subsidized Mortgages in Germany

Note: This content is specific to the German banking system.

If you are buying or building a home in Germany, ignoring the KfW (Kreditanstalt für Wiederaufbau) is a costly mistake. The KfW is a state-owned development bank that partners with commercial banks to offer subsidized loans for eco-friendly housing.

In a high-interest environment (market rates ~3.5-4%), KfW loans can offer rates as low as 1% - 2%.

Key Programs for 2025

1. Climate-Friendly New Construction (KFN - 297/298)

For buying new energy-efficient homes (EH 40 standard).

• Loan Amount: Up to €100,000 or €150,000.
• Benefit: significantly lower interest rate than the market.

2. Home Ownership for Families (WEF - 300)

Strictly for families with at least one minor child and low-to-medium income (limit €90k taxable income + €10k per extra child).

• Benefit: Extremely low interest rates (often < 1.5%). This makes homeownership affordable for families priced out by market rates.

3. Renovation (BEG - 261)

For buying an old house and renovating it to energy-efficient standards.

• Loan Amount: Up to €150,000.
• Repayment Grant (Tilgungszuschuss): This is the magic part. The state pays back part of your loan (5% to 45%) if you achieve certain efficiency targets. It’s free money.

How to Apply

You cannot go to a KfW branch. You apply through your regular mortgage lender (Interhyp, Dr. Klein, Commerzbank, etc.). They will bundle the KfW loan with your main mortgage.

Conclusion

Always ask your mortgage broker: "Am I eligible for any KfW programs?" The blended interest rate of your mortgage could drop significantly.

👉 German Mortgage Calculator (KfW included)