Germany has a high proportion of renters, with 52.8 percent of residents renting their homes. Home prices dipped slightly from 2022 to 2024 but are rising again, supported by the Interhyp-IW affordability index. This index indicates an improvement in home ownership affordability due to declining interest rates and income growth. However, potential buyers must consider that monthly mortgage payments should not exceed 40 percent of their net monthly salary for sustainable home ownership, reflecting financial prudence in a recovering market.
The general rule of thumb in Germany is that your monthly payments on a loan (or mortgage) should not exceed 40 percent of your net monthly salary.
Home ownership affordability has recovered noticeably, driven by declining interest rates combined with income growth.
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