The key facts

  • The ten-year mortgage rate is close to 4.5% — above the late-2023 peak (just over 4.4%)
  • Interhyp links the rise to the war involving Iran; the ECB raised rates twice this year, with the deposit rate at 2.5%
  • House prices rose 0.6% year-on-year in Q2, while new mortgage lending from January to July fell by more than 1.5%

Rates Above the 2023 Peak

Getting a loan to buy a home in Germany is now more expensive than at any time since the 2009 financial crisis, according to the Munich-based mortgage broker Interhyp. According to its data, the typical ten-year loan rate is close to 4.5% and has surpassed the previous peak of just over 4.4% recorded in late 2023. Interhyp CEO Jörg Utecht noted that the average rate on ten-year mortgages has risen from 3.9% as recently as May. The latest survey of lenders, published by the broker on October 15, showed an average rate of about 4.4%, but it continues to rise. At the same time, most surveyed banks expect rates to remain stable over the next two months: 60% forecast a decline over a six-to-twelve-month horizon, while 40% expect further increases.

Regulator Data Confirm the Jump

Both Interhyp's data and Bundesbank statistics on household housing loans indicate that borrowing costs have not been this high since the 2009 crisis. ECB data show the speed of the changes: the average rate on a German mortgage rose from 1.48% in early 2022 to 4.15% by the end of 2023, fell to 3.57% in early 2025, and rose again to 3.91% in the second quarter of this year — even before the latest jump.

War and ECB Policy

Utecht attributed the latest increase mainly to the war involving Iran and the inflation fears it has caused. To contain prices, the ECB raised rates twice this year, bringing the key deposit rate to 2.5%. According to Utecht, the recent increase adds almost 200 euros to the monthly payment on an average loan, and some clients have become more cautious. He believes rates will fall significantly only after the conflict is finally resolved, of which there are so far few signs.

Housing Market: Prices Rise, Lending Falls

Despite the rising cost of credit, 'house prices in Germany continue to rise gradually,' according to an October analysis by the Dutch bank ING: the market's weakness shows in everything except prices. According to the federal statistics office Destatis, in the second quarter prices rose 0.6% year-on-year — more than 5% above the 2024 low, but 8.2% below the 2022 peak. The volume of new mortgage lending from January to July fell by more than 1.5%. ING notes that the chronic shortage of housing supply has prevented prices from correcting more sharply, housing construction remains sluggish, and no significant recovery in demand should be expected in the near future. Borrowers' attention is now on the ECB, which will announce its next rate decision on October 29.