Anyone who owns a property outright and needs capital from it hears mainly one kind of offer: equity release. Lifetime annuity, part-sale, reverse mortgage — the models carry different names, the underlying idea is the same. You give up ownership and receive money for it.
Where a loan against property owned outright is viable, it is usually the cheaper route. Equity release costs you ownership, while a remortgage costs you interest: with a loan you remain full owner and the property passes to your heirs in full, less the remaining debt. Equity release fits when a loan is no longer viable, for example without income.
Equity release costs ownership; a remortgage costs interest. Under a part-sale, annuity or reverse mortgage you give up a share; with a loan you stay full owner and pay interest.
With a loan the property passes in full less the debt. With a lifetime annuity ownership is already gone; with a part-sale they inherit only the remaining share.
It fits when a loan is no longer viable — no income to carry a repayment, a hard-to-value property, or where nobody is meant to inherit.
Equity release (part-sale, lifetime annuity, reverse mortgage) costs you ownership, a remortgage costs you interest — and where a loan is viable, it is usually the cheaper route. With a loan, you remain the full owner, the bank registers a charge and pays out a sum you repay with interest, and the property passes to your heirs in full, less the remaining debt.
With a lifetime annuity, ownership transfers immediately and is generally lost to heirs; with a part-sale, running fees apply and the buyer participates in future value growth. An annuity route makes sense mainly when a loan is no longer viable — for example without income to service a repayment, or with a property that is hard to value.
Otherwise, borrowing against the property is usually the cheaper path, and it is also a way to raise the equity needed for a property purchase abroad without selling anything in Germany first.
There is a second route, advertised less often because less is earned on it: you keep the property and borrow against it. Which of the two is right is not a matter of taste — it depends on whether there is an income that can carry a repayment, on how easy the property is to value, and on whether anyone is meant to inherit.
You sell a share, stay living there and pay a usage fee on the share sold. That fee is not a repayment — it reduces nothing. On an eventual full sale the buyer participates in the increase in value, and an exit fee is usually charged.
You transfer ownership in full and receive a right of residence plus a running payment. The amount depends on your statistical life expectancy. For the heirs the property is generally lost.
A charge is registered, a sum is paid out, and you repay it with interest. You remain the full owner, and the property passes to the heirs less the remaining debt.
Equity release costs ownership; borrowing costs interest. Everything else follows from that. Where an income exists that can carry a repayment and the property is straightforward to value, a loan is almost always the cheaper way to reach the same capital — and it is the only one of the three that leaves the property intact. Where no such income exists, the annuity models are not a worse choice but the only remaining one.
Which of the two prices is higher depends on the interest rate level, the remaining term and your overall financial position — not on a general rule.
The mortgage readiness check shows in a few minutes whether the loan route is realistic in your case.
By taking out a mortgage on your German property: you create the equity before you start negotiating abroad.
The most common reason why property owners come to us is not the desire for an annuity, but a specific goal: a property in Spain or Portugal.
The obvious option is a Spanish bank. For non-residents, however, this is a limited option — it only finances part of the purchase price, and it carries out strict checks on age, type of income and property valuation. Anyone over the age of 65, who has been self-employed or who does not earn their income in euros, will quickly be turned down.
Taking out a mortgage on your German property tackles the problem at its root: you create equity before you start negotiating in Spain. This has three practical benefits — you are seen as a cash buyer and can negotiate accordingly, you are not dependent on a valuation by a Spanish bank, and you can keep the Spanish element to a minimum or avoid it altogether.
You can see exactly what this structure looks like under Mortgaging German Property. The combination of a German mortgage and a Spanish mortgage — often the most cost-effective option — is described under Combination of Spanish Bank / German Top-up Mortgage.
Let’s not sugar-coat this: a property annuity is a sensible option when a mortgage is no longer feasible. This is usually the case when there is no longer any regular income available to cover a mortgage repayment, when the property is in need of renovation and difficult to value, or when there is explicitly no one to inherit it.
On the other hand, anyone receiving a pension, rental income or investment income should at least look into a mortgage before giving up ownership. In this scenario, it is generally the more cost-effective option.
Four pieces of information are sufficient for an initial assessment: the approximate value and outstanding mortgage balance of your current property, your current income, your age, and the scale of the overseas purchase in question.
This makes it possible to determine whether a mortgage is viable, on what scale, and whether it offers an advantage over a property annuity. Without a property to buy, and without any time pressure.
Yes, a loan against a property you own outright can raise the equity for a purchase abroad, without selling anything in Germany first. The bank registers a charge and pays out a sum, and you repay it with interest while remaining the full owner. Where the property to be charged is in Spain rather than Germany, the rules are different again.
Where an income can carry a repayment and the property is straightforward to value, a loan is almost always the cheaper way to reach the same capital. Equity release costs ownership, while a loan costs interest. Where no such income exists, the annuity models are the only remaining route.
Yes, this is the most common reason owners ask: they want equity for a purchase in Spain or Portugal. Borrowing against the property raises the capital before anything is negotiated abroad, so you arrive as a cash buyer. The mortgage readiness check shows in a few minutes whether the loan route is realistic in your case.
Equity release costs you ownership; a remortgage costs you interest. Under an equity release model — a part-sale, a lifetime annuity, a reverse mortgage — you give up a share of the property. With a loan against the property you remain the full owner and pay interest on the sum paid out instead.
With a loan against it, the property passes to the heirs in full, less the outstanding debt. With a lifetime annuity, ownership has already transferred and the property is generally lost to the heirs. With a part-sale, they inherit the remaining share.
When a loan is no longer viable — for instance without an income able to carry a repayment, with a property in poor condition that is hard to value, or where nobody is meant to inherit at all.
Yes — that is the most common reason owners come to us. Raising capital against the property you already own creates equity before you negotiate in Spain or Portugal. Details under using a German property as security.
That depends on the lending value of the property, not on the market value alone. Four figures are enough for a first assessment: the approximate value and any remaining debt on the existing property, your current income, your age, and the size of the purchase you are planning abroad.
It changes how you appear to the seller. With capital already raised you negotiate as a cash buyer rather than subject to finance — which on a fast market is frequently worth more than a fraction of a percentage point on the rate.
It depends on whether there is an income that can carry a repayment, on how easy the property is to value, and on whether anyone is meant to inherit. With a loan a charge is registered, a sum is paid out and you repay it with interest. You remain the full owner, and the property passes to your heirs less the remaining debt. The mortgage readiness check shows in a few minutes whether the loan route is realistic in your case.
A first consultation without obligation — in English, German, French, Spanish or Russian.
A part-sale of a property costs a running usage fee on the share you sold, and the provider shares in future value growth in proportion to their stake.
The remainder is covered by releasing capital on the paid-off property. Against that property lenders go to 50 per cent of the appraised value.
Borrowing through Germany therefore usually means pledging a German property as security; the overseas property itself does not carry the loan.
Buyers who could pay cash rarely ask whether they should. The question is worth asking, for three reasons that only become visible after the purchase.
Remortgage in Spain as a non-resident: at least two of 15–20 lenders will lend against an unencumbered property, as a rule up to 50 % of the valuation.
Its hard limit is not the amount, it is the place: the use has to be in Spain and has to be evidenced, and the funds may not leave the country.
Which UK banks offer Spanish mortgages? Your bank at home releases capital against your property; we arrange the Spanish mortgage on top, any nationality.
Special financing in Spain: stage payments during construction, capital from a paid-off Spanish property, German security, equity raised at home.
Private mortgage lender in Spain: capital privado when no bank will write the case. Arranged from €500,000 — after testing the bank route, not instead of it.
Stage payments in Spain: the developer wants instalments during construction; the Spanish bank pays at handover. One of the 30+ lenders we approach closes that gap.
Raising the equity in Germany when the Spanish bank stops short.
Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.