'Young buys old' - New opportunities for families buying property

Introduction to the 'Young buys old' subsidy program

For many young families with children, the dream of owning their own home often remains out of reach, especially in times of rising property prices and high interest rates. However, this could change with the German government's new 'Young buys old' subsidy program. Since 3 September 2024, families with underage children and medium or lower incomes can apply for low-interest loans via the KfW development bank to purchase and renovate houses or apartments in need of refurbishment.

What is behind 'Young buys old'?

The 'Young buys old' development program aims to make it easier for young families to buy their own home by supporting them in the purchase and refurbishment of older properties in need of renovation. By granting low-interest loans via the KfW development bank, the financial hurdles are lowered so that families with medium and lower incomes can also realize the purchase of residential property. "With this program, families with medium and lower incomes can now also fulfil their dream of owning a single-family home".

Who can use the program?

The program is specifically aimed at families who have at least one minor child and whose annual income does not exceed a maximum of 90,000 euros. This income limit increases by 10,000 euros for each additional child. Another important criterion is that the subsidized property must be owner-occupied. This support ensures that the home ownership actually benefits the families who need it most.

The conditions in detail

The amount of the possible KfW loan depends on the number of children in the family. For families with one child, a loan of up to 100,000 euros is possible, for two children up to 125,000 euros and for three or more children even up to 150,000 euros. The term of the loan can be flexibly selected between seven and 35 years, with a fixed interest rate of ten or 20 years possible. An example: for a loan with a term of 35 years and a fixed interest rate of ten years, the effective interest rate is currently just 1.51 percent.

What savings are possible?

The low-interest loans allow families to make considerable savings compared to conventional bank loans. For example, a family with two children could save up to 18,000 euros. In addition to the purchase price of the property, the eligible costs also include the costs for the associated land.

Conclusion: A program with a future

'Young buys old' offers young families a unique opportunity to realize their dream of owning their own home, even in a tight real estate market. The low-interest loans significantly reduce the financial hurdles, giving more families the chance to invest in their own four walls. Anyone interested in purchasing and renovating an older home should find out about the exact conditions and possibilities of the program at an early stage and submit a corresponding application to the KfW development bank.