For home buyers and property investors, the financing environment remains demanding for the time being. According to mortgage broker Dr. Klein, the representative interest rate for ten-year fixed-rate mortgages stood at 3.97 per cent as of 27 October 2026. Florian Pfaffinger, a member of the company's expert panel, expects the interest rate level to remain at this elevated level in the remaining weeks of the year. Pfaffinger considers an interest rate corridor of 4.0 to 4.5 per cent by year-end to be realistic.
According to the expert, conditions for construction loans are under pressure primarily because of their strong link to long-term interest rates such as government bond yields and swaps. Although the recent rate movement has been sideways, it continues to hover at a consistently high level.
Energy price driver and outlook for core inflation
A key factor for interest rate developments remains inflation. According to recent figures from Eurostat, the inflation rate in Germany climbed to 3.3 per cent in September, up from 2.9 per cent in the previous month. Across the entire eurozone, the rate rose from 3.2 to 3.8 per cent. According to Pfaffinger, this increase is almost entirely attributable to energy prices and particularly high oil levels. European Central Bank policymakers assume that statistical base effects could dampen inflation in early 2027. While the surge in energy is also likely to feed into core inflation, second-round effects should remain manageable overall, meaning that headline inflation could move back towards the two per cent mark in the medium term.
ECB rate pause and geopolitical influences from the US
For the upcoming October meeting of the European Central Bank, the market expects a pause in key interest rates, as the recent surge in inflation has not yet led to noticeable second-round effects. A monetary policy adjustment in December is currently considered likely, however. Depending on the incoming data, two to three further rate hikes could follow by mid-2027.
Additional movement could stem from the upcoming US midterm elections in early November. Donald Trump is under political pressure and operating with shifting priorities, which could trigger swift geopolitical shifts. Should US policy aim for a settlement of the Iran conflict, falling oil prices could also ease interest rate pressure. If, however, the focus shifts more heavily towards the conflict with Russia, rates cannot be expected to ease, a circumstance that currently rules out reliable interest rate speculation.
- —Short-term interest rate trend: Sideways movement with fluctuations
- —Medium-term interest rate trend: Sideways movement with upward potential
- —Forecast range to year-end: 4.0 to 4.5 per cent for ten-year fixed-rate mortgages
