Mortgage rates in 2026: why they're rising, what's next

If you're financing a home in Germany in 2026, you're paying more again: mortgage rates have risen a little every month since March. What's behind it – and where are they heading?

Where rates stand

According to Deutsche Bundesbank statistics, a home loan with the rate fixed for 5 to 10 years cost 3.81% effective on average in August, up from 3.56% a year earlier. Every fixed-rate period has become more expensive, short ones more than long ones.

The Bundesbank figures are averages over all new loans in a month and appear about five weeks later. In September bond yields rose further; ten-year offers are now around or above 4% for many buyers.

Why rates are rising

1. Government bonds. For long fixed-rate periods, banks take their cue from the yields on long-term bonds, above all the ten-year German Bund and Pfandbriefe. The Bund yield was around 3.6% in mid-September – the highest since 2011. Add the bank's margin and the mortgage rate is at 4%.

2. Inflation. The conflict in the Middle East has made energy dearer. In Germany, prices in September were 3.3% higher than a year before. Whoever lends money for ten years asks for more interest when inflation is higher.

3. The European Central Bank. The ECB raised its key rates by 0.25 percentage points each in June and September 2026; the deposit rate is now 2.50%. The key rate mainly drives short-term rates directly – instant-access savings, variable loans. On long mortgage rates it works indirectly: through expectations of how high inflation and rates will be over the coming years.

What's next? Three scenarios

There are no reliable rate forecasts over one or two years – the ECB itself says it decides "meeting by meeting". Its staff expect euro-area inflation to fall from 3.0% this year to 2.5% in 2027 and 2.1% in 2028. But they call the outlook "highly uncertain", with upside risks to inflation and downside risks to growth.

That suggests three scenarios:

• The energy crisis eases. Inflation falls as expected and the ECB stops raising. Yields could ease somewhat, and mortgage rates would rather settle between 3.5 and 4%.
• Inflation stays stubborn. More rate rises, higher yields – mortgage rates well above 4% would then be possible.
• The economy slumps. In a recession yields often fall as investors flee into safe bonds. Mortgage rates could then drop – but in a climate where jobs are less secure.

Mortgage brokers such as Interhyp already expected a "new normal" around the 4% mark at the start of the year. Nobody currently expects rates like those of 2020/21.

What half a percentage point means

For a €300,000 loan with 2% initial repayment:

Half a percentage point costs €125 more a month here – €1,500 a year.

What buyers can do now

• Don't bet on falling rates. If you've found the right home, don't wait in the hope of better rates – they might just as well rise.
• Fix for longer. A 15-year instead of a 10-year fixed rate usually costs a little more but protects you for longer from expensive refinancing.
• Consider a forward loan. If your fixed-rate period ends in the next few years, you can lock in the follow-up rate today – for a surcharge. More in the glossary: Forward-Darlehen.
• Compare offers. Banks often differ by several tenths of a percentage point. Compare loan offers shows which offer is cheapest over the whole term.
• More savings, more repayment. Borrowing less gets you better rates; repaying more leaves less debt at the end of the fixed period.

Sources: Deutsche Bundesbank (MFI interest rate statistics), European Central Bank (decision of 10 September 2026 and projections), Federal Statistical Office. The current average rates are always on current mortgage rates.