Hamburg Offers Low-Interest Loans to Support Young Families in Buying Homes

The city of Hamburg wants to help young families with immediate effect so that they can continue to buy their own apartment or house despite the sharp rise in building interest rates. And through particularly cheap loans. The city expects up to 500 applications. How high the loan and the interest are and who can even benefit from the subsidy.

Interest rates continue to climb, and many banks are currently charging around four to five percent. This means that loans are becoming more expensive every year by several thousand euros compared to the years of extremely low interest rates. As a result, young families in particular, who are dependent on loans when buying an apartment or house, have become significantly more reluctant. Although the desire for your own four walls is unchecked.

Hamburg gives families loans with low interest rates

Therefore, the authority for urban development and housing is now promoting the purchase or construction of one’s own home Loan from the city’s investment and development bank (IFB). The condition is that the apartment or house is actually lived in and the family or individual does not have too high an income. However, it is explicitly aimed at medium-income earners – low earners can probably not afford an apartment in Hamburg anyway.

The subsidy is granted for higher incomes than other comparable subsidy funds. A single person may have an annual income of EUR 75,000 and a family a household income of EUR 100,000. For each child under the age of 18, there is an additional 20,000 euros.

Half the rate on IFB home equity loans

The interest rate is two percent, a maximum amount of up to 150,000 euros can be applied for. The term is 15 years. In the land register, it is subordinate to the loan from the house bank and thus makes it easier to finance the project. But be careful: Anyone who has already built or bought a property cannot get the IFB loan.

Karen Pein, Senator for Urban Development and Housing: “We are making home buying in the Hanseatic city more affordable again. We make it much easier for young families to finance an affordable home with the subsidized loan at only two percent interest.” According to Pein, another positive effect: “Demand is increasing and it’s worth continuing to build.”

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The IFB cooperates with 24 banks that offer this support to the IFB Hamburg. The IFB home loan can be requested from the respective house bank. The bank assumes around 500 applications. Anne Müllender, IFB Board of Management: “A final cap is not currently specified, it will be decided within the framework of the budget.”