Structures of Residential Property Finance 2025 in Germany

In 2025, the Association of German Pfandbrief Banks (vdp) once again conducted a survey among its member institutions active in this business area on the structure of financing for owner-occupied homes and condominiums.

The vdp has been regularly examining the structure of residential property financing since the 1980s. The evaluations are based on regular surveys of member institutions.

The current report focuses in particular on developments from 2009 to 2025:

After strong growth in loan disbursements until 2021, the interest rate shock of 2022/23 brought the momentum to an abrupt end. The affordability of home ownership deteriorated abruptly, forcing many households to postpone their purchases. With the stabilisation of the general conditions, demand for home ownership also stabilised in 2024, and 2025 saw an upward trend again, albeit at a lower level than during the boom years.

The use of borrowed funds is currently slightly above 80%, while the loan-to-income ratio remains moderate at around 26–27% despite higher interest rates. This is made possible by slightly longer calculated terms (around 28 years). Fixed interest rates remain long-term, averaging around 12 years.

Conclusion: Following the interest rate turnaround, affordability is gradually improving again, leading to an increase in demand for purchases and thus for loans. Lenders and borrowers continue to act in a security-oriented manner.

The vdp spotlight „Structures of residential property financing 2025“ is available for download opposite.