How much equity you need? The more the better!
If you want to finance a property, you usually need equity. How much should that be? What counts as equity? And maybe it can be done without it?
These count as equity:
- Savings on accounts
- Cash assets
- Building savings (your own share, not the loan amount)
- Life insurance
- Equity, mutual funds, security
- Real Estate
- Already paid building plots
Get an accurate overview of your finances. Add everything together to determine the available equity.
Tip: Do not use all your equity. If possible, keep a reserve for unpredictable expenses such as repairs.
Our recommendation: At least 20 to 30 percent of the total cost of buying the property should be covered by your own capital. Better even more. Because the higher your share of equity, the less credit you need to borrow.
The reason is quite simple: each lender integrates its risk into the terms. For him, a high proportion of equity means more security and reduces the risk of defaults. As a borrower, you benefit from lower interest rates.