Mortgage Rates 2026: The New Normal
The era of zero interest rates is over. In 2026, the 10-year fixed mortgage rate sits at 3.1% to 3.7% - this is the new normal. Compared to the historic lows of 2021, rates have increased significantly, but they are still below the long-term average.
Current Interest Rate Range by Fixed Period
Cost Comparison: 2021 vs. 2026
For a 350,000 EUR mortgage over 30 years:
2021 (approx. 0.9% interest)
812 EUR/month
2026 (approx. 3.5% interest)
1,586 EUR/month
That is an additional burden of almost 800 EUR per month or nearly 10,000 EUR per year!
Step-by-Step: Your Path to a German Mortgage
Check and Build Your Equity (Eigenkapital)
Plan for at least 20-30% down payment. The more equity you have, the better interest rates you will receive. An additional 10% should be budgeted for closing costs (property transfer tax, notary fees, real estate agent).
Expat Tip: Equity from your home country is accepted. Document the source carefully with bank statements!
Choose a Long Fixed Interest Period (Zinsbindung)
At current rates, we recommend a fixed period of 15-20 years. This protects you from rising interest rates and provides planning security.
- 15-20 years: Optimal balance between rate security and flexibility
- After 10 years: Legal right to cancel (Sonderkuendigungsrecht) regardless of fixed period
Compare Multiple Offers
Get at least 3-5 quotes. Use both your bank and online brokers like Interhyp or Dr. Klein. The interest rate difference can amount to tens of thousands of euros over the loan term!
Tip: Rate inquiries (Konditionsanfragen) are Schufa-neutral and do not affect your credit score.
Combine with KfW Funding
The KfW Bank (government development bank) offers subsidized loans for energy-efficient construction and renovation. Combine your mortgage with KfW programs for better conditions.
- KfW 297/298: Climate-friendly new construction
- KfW 261: Energy-efficient renovation
Consider Energy Efficiency
In 2026, the energy efficiency class massively affects property value and financing conditions:
Class A/B
Value stable, better rates, future-proof
Class G/H
Up to 25% cheaper, but renovation needed!
Important: For properties with poor energy ratings, include renovation costs in your financing plan!
Expert Tips for 2026
Secure Extra Repayment Rights (Sondertilgung)
Negotiate at least 5% annual extra repayment without additional cost.
Set High Principal Repayment (Tilgung)
Start with at least 2-3% principal repayment to become debt-free faster.
Forward Loan for Refinancing
Lock in favorable rates up to 5 years in advance for your follow-up financing.
Watch Commitment Fees (Bereitstellungszinsen)
Negotiate a long interest-free commitment period (12-18 months) for new construction.
Conclusion: Is Buying Property in 2026 Worth It?
Despite higher interest rates, buying property in 2026 can be worthwhile - especially if you plan long-term and bring sufficient equity. Key takeaways:
- Save at least 20-30% down payment
- Choose a long fixed interest period (15-20 years)
- Utilize KfW funding programs
- Check the energy efficiency of the property