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Is a rent deposit guarantee worth it?

In short

Is a rent deposit guarantee (Mietkautionsbürgschaft) worth it? Only short term or if you lack the cash. You pay about 4.4 to 4.7 percent of the deposit each year, around 120 to 127 euros on 2,700 euros, and get none of it back. If the landlord claims money, the guarantor pays and then recovers it from you. If you stay long and have the money, pay the cash deposit in three instalments.

Is a rent deposit guarantee worth it?

What it costs

Published fee rates of German providers, October 2026.

ExampleTypical range
Yearly fee as share of the depositabout 4.4 to 4.7 percent
Minimum fee at one provider25 euros a year
Deposit 3,000 euros, one yearabout 132 to 141 euros
Deposit 2,700 euros, five yearsabout 595 to 635 euros

Fee rates from public provider information, October 2026; your terms may differ.

Legal sources are linked.

Worked example

Net rent 900 euros, five years

A couple rents a flat at 900 euros net rent (Kaltmiete). The deposit is 2,700 euros.

Guarantee over five yearsabout 595 to 635 euros, not refunded
Cash deposit in three instalments2,700 euros, returned with interest
Damage of 400 euros at move out, with guaranteeguarantor pays and claims 400 euros from you

With the guarantee you pay about 1,000 euros for fees and damage, with cash 400 euros. The guarantee only pays off if you lack the cash.

How a rent deposit guarantee works

Instead of paying cash into a deposit account, you give the landlord a guarantee certificate (Bürgschaftsurkunde). An insurer promises to pay up to the deposit amount if the landlord has valid claims from the tenancy.

You pay a yearly fee for this promise. When the tenancy ends and the landlord returns the certificate, the fee stops. Fees paid are not refunded.

DepositFee a year at 4.4 to 4.7 percentOver five years
1,500 eurosabout 66 to 71 eurosabout 330 to 355 euros
2,700 eurosabout 119 to 127 eurosabout 595 to 635 euros
4,500 eurosabout 198 to 212 eurosabout 990 to 1,060 euros

The catch: you still owe the money

A rent deposit guarantee is not insurance for your own debts. If the guarantor pays the landlord, the landlord's claim passes to the guarantor, who asks you to repay it. In the worst case you pay the fees and the damage.

With a cash deposit the landlord deducts from your money and returns the rest with interest. The interest belongs to you (§ 551(3) BGB).

When it makes sense

A guarantee helps when you move and your old deposit has not come back yet. It bridges a few months, and you can switch to cash later if the landlord agrees.

It can also make sense for commercial leases, where deposits are high and the cash is needed in the business.

When it does not

If you stay for years, the rent deposit guarantee costs far more than a cash deposit earns in interest. If you have the money, three instalments are usually cheaper.

Ask for the certificate back as soon as you move out, because fees usually continue until it is returned.

Step by step

  1. Check the deposit: at most three months' net rent.
  2. Ask whether the landlord accepts a guarantee.
  3. Work out the fee over your planned stay.
  4. Compare with paying cash in instalments.
  5. Ask for the certificate back in writing when you leave.

Checklist

  • Deposit not above three months' rent
  • Landlord's consent in writing
  • Fee rate and minimum known
  • Cancellation rules read
  • Certificate returned after move out

Common mistakes

  • Treating the guarantee as insurance against your own damage
  • Paying fees for years although the cash is now there
  • Forgetting to reclaim the certificate

Questions and answers

Frequently asked

Must my landlord accept a guarantee?

No.

The lease sets the form of security.

A guarantee only works with consent.

Do I get the fees back?

No.

They are the price of the guarantee.

Can I pay the cash deposit in instalments?

Yes, in three equal monthly parts, the first at the start of the tenancy.

Can I switch to cash later?

If the landlord agrees.

You pay the deposit and the guarantee ends when the certificate is returned.

When does the guarantee end?

When the landlord returns the certificate.

Fees usually run until then.

Sources

NAMMERT insurance broker

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Your broker: Norman Nammert, trading as NAMMERT.

Insurance broker licensed under section 34d(1) of the German Trade Regulation Act.

Broker register no. D-C08Q-TOSD4-37.

NAMMERT Assekuradeur GmbH is a separate company.

It does not arrange your contract.

Statutory disclosure (German) · Updated

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