“Driven by inflation, tightened monetary policy and the high yields on German government bonds, interest rates on ten-year loans already exceeded the 3.5 percent mark at the end of September,” says Mirjam Mohr, Board Member for Private Customers at Interhyp AG, Germany’s largest private broker construction financing.
According to Interhyp, interest rates for loans with a ten-year fixed interest rate are currently 3.8 percent. The experts do not see a rapid trend reversal. “Even if some of the expected increases in key interest rates have already been priced in, property buyers must continue to expect slightly higher building interest rates,” explains Mirjam Mohr. “But downward fluctuations are possible. In addition, adjustments to conditions are often priced in at different speeds by the banks, so comparing offers is particularly worthwhile in a volatile environment.”
According to Interhyp, ten-year real estate loans cost over 3.5 percent today, more than three times as much as exactly a year ago, when an average of one percent was due. In order to classify the current interest rate level, it is also advisable to look into the past, according to the expert: “A good ten years ago, interest rates for ten-year real estate loans were also between three and four percent, 15 years ago around five percent.”
However, real estate prices and thus the required loan amounts were also lower.
