Overview

• Mortgage rates for ten-year loans have risen to 3.6%, marking the highest level in seven months and the sharpest weekly increase since the 2008 financial crisis.
• The planned €500 billion infrastructure package and relaxed debt limits have caused turbulence in bond markets, driving up yields on German ten-year bonds.
• Higher bond yields have pushed borrowing costs upward, with some experts predicting mortgage rates could reach 4% by the second half of the year.
• The European Central Bank recently cut its key interest rates to stimulate the economy, but long-term mortgage rates have decoupled from this trend due to market volatility.
• Rising borrowing costs threaten to dampen demand for home loans and pose challenges to Germany's real estate market, which had shown signs of recovery.