Why building interest rates are rising even though the ECB is lowering the key interest rate

Why are construction interest rates rising despite falling key interest rates?

The ECB's key interest rate mainly influences short-term interest rates. Construction loans, on the other hand, are long-term loans whose interest rates are based on the yields of long-term government bonds. If these yields rise, construction interest rates also follow suit. Various factors, such as increased government spending and rising inflation, are currently leading to an increase in bond yields, which in turn is pushing up construction interest rates.

Effects on property buyers

For potential property buyers, this means higher financing costs. Experts therefore advise not to speculate on interest rates falling further, but to act promptly if suitable offers are available. A comprehensive comparison of different financing offers is essential, as not all banks adjust their conditions to the same extent.

Conclusion

The current situation shows that interest rate cuts by the ECB do not necessarily lead to cheaper mortgage loans. An understanding of the underlying mechanisms and careful planning are therefore essential for property buyers in order to avoid financial surprises.