What a 3.72% mortgage rate actually means for your budget

Every few weeks, a client asks us some version of: 'Should I wait for rates to drop before I buy?' The honest answer is usually no, and here's why.

The average rate on new German home loans is sitting around 3.72% as of early 2026 — a little higher than a year ago. Most mortgage brokers expect that to hold roughly steady in the near term, with a gradual drift upward over the next couple of years as government borrowing increases. Nobody serious is forecasting a return to the sub-2% rates of the 2015–2021 era. That period was the exception, not the rule.

So what does 3.72% actually mean in practice? On a €400,000 mortgage over 20 years, the difference between 3.7% and, say, 3.2%, works out to roughly €100–120 a month. Meaningful, but not the difference between affording an apartment and not. What actually moves the needle far more is the size of your down payment and which state you're buying in, since property transfer tax alone can swing by thousands of euros between, say, Bavaria and Berlin.

Our advice: don't let 'waiting for a better rate' become the reason you never buy. Lock in a rate you can comfortably live with today, and put your energy into the things you actually control — a bigger deposit, a thorough building inspection, and a lender who's genuinely used to working with international buyers. Those decisions move your outcome far more than a half-percent rate swing you can't predict anyway.