I was wondering if anyone knows if mortgage payments can be taken off for the purposes of calculating income in Germany. Also does anyone know the income tax rate for non-residents.

Yes, the interest part can be offset from tax (not the repayment part of course). Tax rates are progressive and depend on the income. You are likely to pay 15-40% tax depending on your german income.

I know they are going to put there VAT up to 19%

Presumably the German authorities will only allow interest on German mortgages if you're non-resident. Interest on a loan taken out elsewhere may not be allowable. Andrew

Any pointers to quick&dirty guide to taxes on property investors in Germany?

My german tax advisor says interest on foreign loans is allowable, but you need to have a very clear track to prove you used those funds (loan) to buy the german property. German tax laws are complex, I would certainly recommend you discuss every aspect with a tax advisor in Germany. The few hundred pounds can save you future headaches.