Existing mortgage: is there a subsidy for repayment from 2027?

Last updated: 12 October 2026 · under the rules from 1 January 2027 · Publisher: INTERNA · responsible: Marc A. Schnitzler, in mortgage financing since 2005

Yes. If you already live in your own home and are paying off a loan, from 2027 the state adds money if you are eligible and save into a subsidised contract alongside: up to €540 a year for €150 a month and up to €300 for each child. From 1 January 2028 you may put the balance including subsidies into your loan under the new rules, from as little as €3,000. Your loan simply continues as normal with your bank.

Example: single parent, one child, €150 a month

	per year	in ten years
Your own contribution	€1,800	€18,000
Basic subsidy	€540	€5,400
Child subsidy	€300	€3,000
available for repayment	€2,640	€26,400

Of every €100 that goes into the loan, about €32 comes from the state in this example. A couple, both working, with two children gets €1,680 a year if each pays €150 a month, €16,800 in ten years. Calculated without interest and without contract costs. The child subsidy is paid as long as child benefit (Kindergeld, the monthly state payment for children) is paid.

Two routes to subsidised repayment

Save alongside and pay off: Your loan continues, whatever the bank. You save into a subsidised home savings contract (Bausparvertrag, a savings contract with a building society) and later put the balance including subsidies into the loan, for example when the fixed-rate period ends, meaning the period for which your interest rate is fixed, or as an extra repayment if your loan agreement allows it.
Subsidised loan: With a loan approved by the state for this purpose, for example a home savings loan under a suitable home savings plan, the repayment itself counts as a subsidised contribution. That is the part of the instalment that makes the loan smaller. You get the loan once the building society has checked your income and your collateral. If follow-up financing is due anyway, it is worth including this route in the calculation early.

Your advisor works out with you which route suits your loan. For this, your advisor needs the remaining debt, the interest rate and the end of your fixed-rate period.

What you need to know

Living there yourself: Only the home you live in yourself as your main residence is subsidised. You should keep living there until your home subsidy account (Wohnförderkonto) has been fully taxed in old age, that is about five years after the payouts from your contract start. If you move out for good earlier, the remaining amount is taxed all at once, unless you buy a new home of your own within fixed deadlines.
Tax is paid in old age: What you put into your home is recorded by the central subsidy office (Zulagenstelle) in your home subsidy account. You pay tax on this amount in the five years after your pension starts, usually at a lower tax rate than during your working life. You do not have to pay back the subsidies.
Refinancing is allowed: If you change banks for your loan, the subsidy remains possible.

How much subsidy does your household get? The subsidy calculator works out in one minute how much subsidy you can get. An advisor then checks with you whether everything fits your situation. This conversation is free of charge and in English.

Calculate your subsidy

Frequently asked questions

Can I use the home-ownership pension (Eigenheimrente) for my existing loan?

Yes. You save into a subsidised contract alongside and use the balance including subsidies for repayment from 2028, from €3,000. With a loan approved for this, the repayment itself can also be subsidised.

Do I have to change my bank for this?

No. Your loan continues with your bank. You save in a separate subsidised contract.

How much subsidy do I get for repayment?

As much as for saving, if you are eligible: up to €540 basic subsidy a year for €150 a month and up to €300 per child with child benefit. A single parent with one child thus has €26,400 for repayment after ten years, €8,400 of it from the state.

Do I have to pay back the subsidies if I use them for repayment?

No. The amount used is taxed in old age, spread over the five years after your pension starts. You only have to pay back if you use the balance for something other than your home or your pension.

Sources

The money in the contract is meant for your retirement and your own home. If you have the subsidised savings paid out early, for example by cancelling the contract, you have to pay back the subsidies and tax benefits.

The examples explain the legal rules in simplified form. They do not replace tax or legal advice for your personal situation. Contract costs and interest are not included. This page was created with the help of artificial intelligence and translated from the German original. INTERNA is responsible for its content. More information