Financing conditions have a significant influence on the property market. Since the beginning of 2025, the average loan amount for property purchases has fluctuated slightly between 310,000 and 319,000 euros.
In April 2025, buyers of residential property borrowed less money: the average loan amount was around 310,000 euros. This means that the proportion financed by borrowing fell by 9,000 euros compared to the previous month. The standard instalment rose to 1,458 euros and thus corresponds to the amount that borrowers paid at the same time a year ago. Compared to the previous month, however, a higher monthly instalment can be seen. The brief rise in building interest rates since mid-March is making itself felt here.
The so-called standard rate is calculated using the following parameters: a loan amount of 300,000 euros, a repayment of two per cent, a loan-to-value ratio of 80 per cent and a fixed interest rate of ten years. With the help of this sample calculation, the costs of a mortgage can be compared over a longer period of time and the development of average building interest rates during this time can be illustrated.
At an average of ten years and seven months, the fixed-interest period in April 2025 is significantly shorter than in previous months. Due to the statutory special right of cancellation, property buyers can cancel a loan prematurely after at least ten years, even if they opted for a longer fixed interest rate at the time the contract was concluded.
At 1.73 per cent, the repayment rate remains almost stable compared to the previous month. Compared to the past twelve months, only nuances are recognisable here.
KfW's state subsidies for property financing have been in continuous decline for the past six months. It remains to be seen what influence the new German government's policies will have on this financing component.
Photo: © aleksandra85foto, Pixabay
