Financing your own home with a low income – is that possible?

3 min

Not only passionate do-it-yourselfers want to pursue their favorite hobby within their own four walls. For many people, this dream seems to be impossible to achieve due to a manageable income and low financial reserves. In the current interest rate environment, there are realistic options for financing your own home, provided that the demands on the house or condominium remain realistic. We explain how you can finance your own home even with a low income.

Dreaming is allowed – within certain limits

Most of the readers of our platform would like a stylish interior, a large garden or simply a better quality of life than they experience in the current rental apartment. You are allowed to dream of owning your own home at any time, provided that you do not lose sight of the realistic possibilities in planning and financing.

The current rent payments are a good measure of how much money would be available for possible construction financing or the repayment of a loan for the purchase of a property. Even if there is a low income, this is paid proportionally for the rent of the current apartment. This amount of money could also be used for Paying off the home loan to use.

Important for the calculation: The term of loan agreements for real estate extends on average over ten to 20 years, depending on the fixed interest rates. After this, follow-up financing is usually provided. Interested parties can thus calculate over 20 to 30 years and take into account how much money would flow into rent payments during this time.

Find the right budget

Another benchmark for realistic framework conditions for loan repayments, in addition to the monthly income, is the existing equity. Many households with a low income have no recognizable private wealth. A few decades ago, this would have been the core argument that financing a property would not be possible.

Times have changed, and many credit institutions now offer full financing. You do not need to bring equity capital for this, even if the loan amount is of course higher. Without equity, the lending rate is likely to be slightly higher, which can nevertheless contribute to secure financing of a large or small home.

Strong advice on low-income financing is important

With all questions about financing a property, it is important to rely on reliable advice. This aspect becomes all the more important when the financing has to be paid off with a small income. In addition to the house bank, which primarily wants to sell its own loan products, it is worth working with one on a low income neutral financial specialists even more so in the real estate sector.

Independent service providers like Hüttig & Rompf have specialized in advising those interested in owning a home. The services offered by such providers include, on the one hand, factual advice. Many private tenants may consider buying their own property for the first time in their lives. This gives rise to many questions that an industry expert can competently clarify.

You can finance your own home even with a small budget. However, if you have a low income, you have to refurbish or extensively renovate your new home yourself.

On the other hand, financing partners undertake a fundamental, mathematical analysis of the credit market. Both Inquiries to various banks and credit institutions the potential buyer or builder remains anonymous for a long time, so that the obtaining of loan offers is completely discreet. Such an assignment is non-binding, so that the failure of a hoped-for financing does not have any disadvantage in terms of creditworthiness or the reputation of credit institutions. As a rule, the first condition request runs without calling up Schufa data.

Think long-term when planning a low income

Serious financial planning and advice with a professional service provider is also reflected in their long-term prospects. While banks are primarily interested in the customer, the independent service provider would like to secure follow-up orders and recommendations by offering first-class advice and favorable conditions. All important questions about the term and fixed interest rates are discussed with the potential borrower. The conclusion of follow-up financing is mandatory, which should lead to a strong forward loan in the current phase with historically low building interest rates.

When the income is low, working with a credit intermediary makes all the more sense:

The independent financial intermediary carefully checks whether the loan to be brokered can be borne by the borrower with a low income. Because a credit burst would also damage the reputation of the intermediary with his business partners, the banks.

In case of doubt, the financing of a cheaper house is recommended, where the owner can improve it with his own work and renovation work. If you decide on a house in need of renovation, you should definitely go through the costs of the renovation carefully. Because with the increasing demand for own homes, the costs for craftsmen have risen significantly compared to previous years.

Photo credits: Adobe Stock / terovesalainen, Adobe Stock / eranicle (sorted chronologically or according to the order of the images used in the buying guide)


Passionate about DIY for over 10 years and all the new tools, I give you through this blog all my advice, tips, tests in all areas: carpentry, electricity, masonry, gardening, home automation ...


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