French people in Germany: beware of preconceived ideas about mortgage rates
Are you a French national living in Germany and planning to buy a property?
So you've probably already asked yourself this question: “Should you wait for interest rates to fall before taking out a mortgage in Germany?”
At Expat Finances, specialist in real estate financing for the French in Germany, we hear this question every day.
And yet.., the answer is often misunderstood.
Because no, mortgage rates in Germany do not directly follow announcements by the European Central Bank (ECB).
Real estate rates in Germany depend mainly on German government bonds
Many believe that if the ECB lowers rates, home loans will follow.
But in reality, German banks rely mainly on 10-year German government bond yields.
In other words:
Even if the ECB lowers its key interest rate, this in no way guarantees a fall in property rates.
And lately, we saw the exact opposite.
Case in point: the ECB lowers interest rates... and mortgages rise!
At the beginning of March 2025, the ECB announced a further reduction in its deposit rate.
Some customers wanted to wait, hoping to get a better rate for their home loan in Germany.
But at the same time, the German government announced a sharp increase in public debt. And the European Union proposed a massive financing plan for Ukraine. The result: visit German bond yields jumped +0.4 1Q3Q, bringing with them mortgage rates.
This kind of turnaround shows that the link between the ECB and mortgages is indirect, even misleading.
Buying in Germany: the right time is when you're ready
In Germany, mortgage rates are currently around 3.8% (rate for a 10-year Zinsbindung - see our article Mortgages in Germany: 5 differences from France - Expat Finance)
Waiting for an eventual drop may:
- Make you miss the ideal property (good homes go fast)
- Reduce your borrowing capacity if rates rise
Our advice:
Don't bet on a hypothetical fall in interest rates. Plan your financing now.
What we offer to French buyers in Germany
At Expat Finances, we support French expatriates in Germany in their real estate project, from loan simulation to the signature at the notary's office.
Our services include :
- Analysis of your borrowing capacity in Germany
- Comparing best mortgage rates with hundreds of banks
- Personalized support (in French) on all questions : Zinsbindung, Tilgung, Nebenkosten, etc.
And all that, free of charge and with no obligation. Contact Expat Finance - Expat Finance
Conclusion: if you have a real estate project in Germany, don't wait!
No one can predict the exact evolution of rates.
But what is certain is that the right time to buy is when your project is ready, Not when you're trying to guess the market.
Get advice now, secure your current interest rate, and move ahead with your real estate project in Germany.
