For families planning to buy a home in Germany in the future, the dream of owning a home may be more and more expensive, as mortgage rates will rise as housing prices rise. This is the latest news from the German media.
Although the interest rate increase on mortgage loans is still at a low level, it is no doubt the stage of the lowest interest rate on mortgage loans in history has ended.
The main reason for the rise in mortgage interest is the development of long-term bond yields. For example, the yield on German government bonds in the ten-year period has risen from 0.3% since mid-December to around 0.7%. Normally, the mortgage interest rate should be about 1 percentage point higher than the government bond yield.
For home buyers, it means that the cost of buying a home is higher. Max Herbst, an interest rate expert from FMH, a financial consultancy, even expects interest rates to rise sharply in the next four to six weeks.
Postbank CEO Lars Stoy told the German photo newspaper: "Government bond yields have risen and private clients' mortgage rates will rise."
• ING Diba's Thomas Hein also expects “the German mortgage rate will rise slightly in the coming months”.
• Axel Guthmann, Director of LBS Alliance: “Although we do not expect the rate hike process to be very fast, the days of extremely low interest rates have passed.”
The first banks in Germany have begun to adjust interest rates. According to FMH data, for a 15-year loan with a loan period of 200,000 euros, the current average interest rate is 1,88%, compared with 1,78% in December. For real estate buyers, the interest cost of the loan is about 3,000 euros.