Enlarge image
Construction site of a single-family house: Extreme rise in interest rates in just one week
Photo: Julian Stratenschulte / dpa
While the banks have so far been extremely reluctant to charge interest on deposits, they are already cashing in heavily on borrowers.
Real estate buyers in particular are feeling the effects of this at the moment.
The average effective interest rate for ten-year financing rose above the 3 percent mark for the first time in more than ten years on Wednesday, as announced by the Frankfurt-based FMH financial consultancy.
Interest rates of more than three percent for ten-year construction loans were last seen on April 5, 2012.
The most recent increase in building interest rates since June 7 has been "particularly extreme" - with a jump from 2.79 to 3.02 percent in one week.
The trigger is probably the high inflation and the announcement by the European Central Bank that it will raise key interest rates.
Four percent in just a few weeks?
Loans for real estate buyers are likely to become more expensive, FMH founder Max Herbst expects.
In April he thought four percent interest for ten-year financing until the end of the year was conceivable.
That is now conceivable “after the summer break”.
Interest rates have risen sharply in recent months.
In December, the interest rate for ten-year financing was still 0.9 percent.
Due to the high interest rates, owning a home is worthwhile for fewer and fewer consumers.
The German Economic Institute (IW) recently calculated that at three percent interest on loans, owner-occupier costs rise so much that renting is cheaper than buying in the long term in 86 of the 401 German administrative districts and urban districts.
The reason for the rising building interest is the generally rising interest rate level on the capital markets.
Because of the high inflation, central banks are under pressure to tighten their loose monetary policy.
The US Federal Reserve will decide on further steps in the evening.
A rate hike of at least 0.5 percentage points to a range of 1.25 to 1.5 percent is expected.
After much hesitation, the European Central Bank (ECB) also decided last week to exit its ultra-loose monetary policy: the multi-billion dollar bond purchases will end on July 1st.
At the next regular meeting of the ECB Council on July 21, the central bank intends to raise key interest rates for the first time in eleven years, initially by 0.25 percentage points each time.
apr/dpa