ÌÇÐÄÆƽâ°æ

After a period of record-low mortgage interest rates, the cost of mortgage borrowing in Germany surged in 2022. In 2019, mortgage rates declined notably, falling as low as **** percent in December 2020. This downward trend reversed in 2021, as mortgage rates started to gradually pick up. Onve-to-five and five-to-ten-year mortgage loans had the lowest rates in November 2025 at **** percent, while floating-rate mortgages up to one year were the most expensive at **** percent. Mortgages with over **-year fixed period – the most popular loan type among homebuyers — had an interest rate of ****Ìý±è±ð°ù³¦±ð²Ô³Ù.Ìý

Why did mortgage rates in Germany increase?

In 2022, the annual inflation rate in Germany experienced a swift rise, prompting the central bank to raise interest rates to counter this surge. The European Central Bank (ECB) is responsible for determining Germany's central bank interest rate. In July 2022, following a prolonged period of stability, the average interest rates in Germany began a steady rise before reaching a plateau between September 2023 and May 2024. This increase was intended to stabilize prices, but it also meant higher borrowing costs for those seeking mortgages. In June 2024, the ECB began cutting interest rates in response to Germany's inflation rate slowing down.

Downturn in Germany's home loan borrowing

From 2022 onward, the gross residential mortgage lending in Germany fell dramatically. Besides the higher interest rates, the downturn can be explained by the slowed pace of economic growth, which makes individuals and businesses more cautious about big investments such as buying a home. Additionally, the German housing market suffers a chronic undersupply, meaning that homebuyers often struggle to find an affordable home to purchase. Mortgage lending started to gradually increase again in the latter half of 2023.