Short Version
- KfW is the German state development bank (Kreditanstalt für Wiederaufbau). It offers low-interest loans and direct grants for energy-efficient construction, property purchases, and heating upgrades.
- You never apply at KfW directly. Your Hausbank (German bank) submits the application. The approval must happen before you sign a purchase contract or start construction.
- We cover seven programs: 297/298 (new build), 300 (family new build), 308 (young buys old), 124 (home ownership), 261 (renovation), 358/359 (supplementary credit), and 458 (heating grant up to 70%).
- KfW publishes a specific rate only for program 297/298: from 0.6% effective p.a. (EH40 + QNG tier, up to 150,000 EUR; from 1.0% for EH55, up to 100,000 EUR), both 10-year fixed, as of 2 March 2026. For all other programs, the binding rate comes from your Hausbank. Regular mortgages currently sit around 3.5 to 4.5% p.a. (approximate, 2026).
- KfW loans are available to people of any nationality with a residence in Germany. Your Hausbank checks creditworthiness the same way it would for any loan.
What Is KfW?
KfW (Kreditanstalt für Wiederaufbau, meaning "Reconstruction Credit Institute") is Germany's state-owned development bank. It offers subsidized loans and direct grants for energy-efficient construction, property purchases, and heating upgrades. The rates are far below what any commercial bank can offer because the German government backs these programs.
One thing that catches many people off guard: KfW publishes fixed interest-rate numbers only for certain programs. For most programs, the exact rate depends on the day, the loan term, and your bank's offer. We give you the verified facts for each program and tell you clearly where to get the current rate.
For expats and newcomers planning to buy or build in Germany, KfW funding can cut your monthly mortgage payment by several hundred euros. You can apply for most programs through your Hausbank or a mortgage broker. You can also check general financing options here.
Limited Budget: Apply Early
The KfW funding pots are capped. The climate-friendly new build program (297/298) in particular can fill up mid-year. Once the budget is gone, KfW stops accepting new applications for that tier until the next funding round. Apply as early as possible.
The Seven KfW Programs for 2026
Climate-Friendly New Construction
For building or buying a new energy-efficient home. Two efficiency levels with different rates and loan caps. Since 2 March 2026, the rates dropped significantly. This is the only program for which KfW publishes a specific effective interest rate.
EH40 + QNG (highest standard)
- Up to 150,000 EUR per unit
- From 0.6% effective p.a. (10-year fixed)
- Requires QNG sustainability seal
EH55 (Climate-Friendly standard)
- Up to 100,000 EUR per unit
- From 1.0% effective p.a. (10-year fixed)
- Budget limited: ~800M EUR total (2025/2026)
Source: KfW press release 27 Feb 2026, rates effective since 02.03.2026. Market context: regular mortgages currently around 3.5-4.5% p.a. (approximate, 2026). KfW adjusts conditions continuously.
Example: How Much Can You Save?
Say you take the maximum KfW 297/298 EH40 loan of 150,000 EUR at 0.6% p.a. over 10 years, compared to the same amount at a typical bank rate:
Typical bank mortgage (approx. 3.5% p.a.)
approx. 52,500 EUR
Interest cost over 10 years
With KfW 297/298 (0.6% p.a.)
approx. 9,000 EUR
Interest cost over 10 years
That is a difference of roughly 43,500 EUR just from the lower rate. Want to compare construction financing options? Our construction financing comparison shows you current offers.
Simplified example: interest costs only, no amortization. Actual costs depend on repayment structure. Market rate and KfW rate can change.
Wohneigentum für Familien (Family Home Ownership, New Build)
Aimed at families with children who are building a climate-friendly new home or buying one for the first time. The loan amount grows with the number of children.
- Loan up to 170,000 EUR (1 to 2 children), 200,000 EUR (3 to 4), or 220,000 EUR (5 or more)
- At least one child under 18 in the household
- Household income max. 90,000 EUR, plus 10,000 EUR per additional child
- Self-use required; climate-friendly new build or first purchase
- One of the most affordable programs for families building new
KfW 300 is a low-interest loan. The binding rate is available daily on kfw.de or from your Hausbank. Source: KfW, Finanztip.
Jung kauft Alt (Young Buys Old)
Built for families buying an older existing property with poor energy class (F, G, or H) and committing to renovate it. The loan amount depends on the number of children.
100k-150k
EUR loan
100k (1 child) / 125k (2) / 150k (3+)
max. 90,000
EUR household income
+ 10,000 EUR per additional child
Requirements: At least one child under 18. Property must be energy class F, G, or H. The home must be renovated to at least Effizienzhaus 85 EE (energy efficiency standard) within 4.5 years of purchase.
Good to know: For 2026 applications you will typically need your tax assessments from the two previous years. The binding rate comes from your Hausbank; KfW does not publish a fixed number for this program.
Source: KfW product information 308, Finanztip.
Wohneigentumsprogramm (Home Ownership Program)
The classic entry-level program for anyone buying or building a self-used home, with no income limit and no energy standard required. That combination makes KfW 124 particularly interesting for newcomers who simply want to get on the property ladder.
- Loan up to 100,000 EUR (raised from 50,000 EUR in early 2026)
- No income limit and no energy standard required
- Self-use required
- Can be combined with other KfW programs such as KfW 300
KfW 124 is a low-interest loan. The current rate is published daily on kfw.de; your Hausbank gives you the binding figure. Source: KfW, Dr. Klein.
Energy-Efficient Renovation
For comprehensive energy renovation of existing homes, covering insulation, windows, heating systems, or full retrofits. It combines a low-interest loan with a repayment grant (Tilgungszuschuss) that reduces what you actually owe.
- Up to 120,000 EUR per unit (up to 150,000 EUR with EE class)
- Tilgungszuschuss staggered by efficiency tier (around 5% to 20%), more with bonuses
- Certified energy consultant (Energieberater) required
- Can be combined with KfW 358/359 supplementary credit
The Tilgungszuschuss effectively turns part of your loan into a grant. The exact amount depends on the efficiency standard you reach. Your bank calculates the precise rate and grant for your project. More about property financing in our mortgage guide for Germany.
Source: KfW.
Supplementary Credit for Individual Measures
This one is easy to miss but can be valuable. If you already received a BEG subsidy (Bundesförderung für effiziente Gebäude) for a specific upgrade, such as insulation or heating, you can add a low-interest supplementary loan on top to cover the remaining costs.
- Up to 120,000 EUR per unit
- KfW 358: interest-reduced if household income is 90,000 EUR or below
- KfW 359: standard rate, no income limit (also for landlords and investors)
- Only available in combination with a prior BEG subsidy
KfW 358/359 are low-interest loans. The binding rate comes from your Hausbank or kfw.de/konditionen. Source: KfW.
Heating Replacement Grant
Not a loan. A direct grant for switching from oil or gas heating to a heat pump, biomass system, or district heating. No repayment required. Unlike other programs, you apply for this one yourself through the "Meine KfW" portal, but you still need to apply with a contract that includes a suspensive condition before the work starts.
Grant components (combinable)
- Base grant30%
- + Income bonus (household income 40,000 EUR or below)+30%
- + Climate-speed bonus (switching early from fossil heating)+20%
- + Efficiency bonus (e.g. natural refrigerant heat pump)+5%
- Maximum total (capped)70%
Eligible costs are capped: For the first unit in a self-used home the cap is 30,000 EUR. At 30% base grant that is a maximum of 21,000 EUR, plus the emission-reduction surcharge for qualifying biomass systems.
Tip: Funded heat pumps must meet certain technical requirements, including noise limits. Have your energy consultant confirm the model is on the eligible list before you buy.
Source: KfW.de, BEG funding guidelines.
All Seven Programs at a Glance
| Program | Purpose | Amount | Rate / Grant |
|---|---|---|---|
| 297/298 | New build (EH40/EH55) | 100k-150k EUR | from 0.6% (Mar 2026) |
| 300 | Family new build | up to 220k EUR | low-interest, see kfw.de |
| 308 | Family buys older home | 100k-150k EUR | low-interest, see kfw.de |
| 124 | Self-used home (no restrictions) | up to 100k EUR | low-interest, see kfw.de |
| 261 | Energy renovation | up to 150k EUR | + repayment grant (5-20%) |
| 358/359 | Supplementary credit | up to 120k EUR | low-interest, see kfw.de |
| 458 | Heating replacement | Grant (no loan) | grant up to 70% |
All data without guarantee. Binding rates come from your Hausbank or kfw.de/konditionen. KfW adjusts conditions continuously. As of June 2026.
How to Apply: Step by Step
Pick the right program
New build? Try KfW 297/298. Family building new? KfW 300. Buying an older home with children? KfW 308. Just want to buy with no energy strings attached? KfW 124. Renovating? KfW 261 or 458. A mortgage broker can help you combine programs.
Hire an energy consultant
Most energy-related programs (261, 297/298) require a certified Energieeffizienz-Experte (energy efficiency expert). They confirm your building meets the technical standards. Find one through the official dena list at energie-effizienz-experten.de.
Talk to your Hausbank or broker
KfW loans are never applied for directly. Your Hausbank or a mortgage broker submits the application. They structure how the KfW portion fits with your regular mortgage and give you the binding rate.
Get approval BEFORE you start
KfW approval must be in place before you sign a purchase contract or break ground. For the heating grant (458), use a contract with a suspensive condition so you can apply before the work begins. Starting early means losing everything.
Warning: Starting early permanently forfeits your entire funding entitlement. This cannot be undone.
Build, buy, or renovate
After written approval, you can move forward. Funds are disbursed according to construction progress or upon purchase completion. Processing often takes several weeks; KfW gives no fixed timeframe, so apply early.
Can Foreigners Apply? Eligibility and SCHUFA
KfW loans are generally open to anyone with a residence in Germany. Nationality is not the deciding criterion. Your Hausbank checks your creditworthiness the same way it would for any loan. If you are new to Germany, your SCHUFA credit history will be one of the factors. Start building your SCHUFA as early as possible by opening a bank account, registering your address (Anmeldung), and avoiding unnecessary hard credit inquiries.
If your residence permit is limited or you have a shorter German credit history, some banks may ask for a larger down payment or additional documents. A larger equity contribution generally strengthens your application regardless of nationality.
If you are a foreigner applying for financing in Germany, our construction financing comparison shows you which options fit your situation.
Pros and Cons of KfW Funding
Advantages
- Interest rates far below market level (297/298 published; others also low)
- Tilgungszuschuss reduces your loan balance (261)
- Combinable with regular bank mortgages
- KfW 458 grant requires no repayment at all
- Available to anyone with a residence in Germany, regardless of nationality
- Programs can often be stacked together
Things to Consider
- Must apply before construction or purchase (no exceptions)
- Energy consultant costs often 1,000 to 3,000 EUR
- Strict technical requirements for buildings
- Budget limits can close programs mid-year
- Processing often takes several weeks; plan ahead
Compare Financing Options for Your Home
KfW funding usually covers only part of the cost. The rest comes from your bank. Compare financing options here, free and in a few minutes.
Related Guides
Frequently Asked Questions
Sources: KfW.de (program pages 297/298, 300, 308, 124, 261, 358/359, 458), KfW press release 27 Feb 2026 (rates effective 02.03.2026), Finanztip, Dr. Klein, BMWSB (EH55 budget). All interest rates as of March 2, 2026. Rates, conditions, and budgets can change; verify with your Hausbank or kfw.de/konditionen before applying.