Understanding Current ECB Interest Rates
The European Central Bank (ECB) has set two key interest rates that affect all loans in Germany. These rates determine how much banks charge for lending money.
Deposit Rate
2.0%
The rate banks receive when they deposit money at the ECB. This is the floor for interest rates.
Main Refinancing Rate
2.15%
The rate at which banks borrow money from the ECB. This influences the rates they offer to customers.
February 2026 Forecast
97% Probability: Rates Will Stay Unchanged
Financial experts predict that the ECB will not change interest rates in February 2026. This means stable loan conditions for the coming months, giving you time to plan your finances.
Good news for borrowers: No sudden rate increases expected in the near term.
Current Loan Rates in Germany
Here is how ECB rates translate into actual loan rates you will encounter in Germany:
Mortgages (Hypotheken)
Home loans and property financing. The lowest rates are available for loans with higher down payments (Eigenkapital). As an expat, having 20-30% down payment can significantly improve your rate.
Car Loans (Autokredite)
Financing for new and used cars. Manufacturer banks (like VW Bank, BMW Bank) often offer better rates than regular banks. Compare both options before deciding.
Overdraft (Dispo)
Overdraft on your current account (Girokonto). This is the most expensive form of borrowing. Avoid using your overdraft if possible - a personal loan is almost always cheaper!
Warning: Overdraft rates are almost 6x higher than mortgage rates! If you regularly use your overdraft, consider getting a personal loan (Ratenkredit) instead - it will save you significant money.
Why No Rate Cuts Expected?
Many people wonder why the ECB is not lowering interest rates. Here are the main reasons:
- Inflation Control: Inflation is not yet stable at the target of 2%. Lower rates could reignite price increases, hurting everyone is purchasing power.
- Government Debt: High government debt in some EU countries requires careful monetary policy. The ECB must balance growth with financial stability.
- Geopolitical Uncertainty: Global conflicts and trade tensions make the ECB cautious. Unpredictable events could affect the economy quickly.
How to Find the Best Loan as an Expat
Even with stable ECB rates, there are significant differences between banks. Here is how to find the best deal:
- Compare multiple providers: Rate differences of 1-2% are common between banks
- Look at the effective annual rate (effektiver Jahreszins): This includes all costs and fees
- Check for special repayment options: Flexibility to pay extra can save money long-term
- Use free comparison tools: Quick, non-binding, and shows you all options
Good news for expats: You can get loans in Germany even without a long Schufa history. Some banks specialize in working with expats and newcomers. Having a permanent contract (unbefristeter Vertrag) and a German address significantly improves your chances.
Key Takeaways
- ECB Deposit Rate: 2.0% | Main Refinancing: 2.15%
- February 2026: 97% probability rates stay unchanged
- Mortgages: 3.5-4% | Car loans: from 5.79% | Overdraft: 11.64%
- Always compare multiple offers before deciding!