German Debt Plan Triggers Sharp Rise in Mortgage Rates

A proposed €500 billion infrastructure package by SPD and Union leads to the steepest weekly increase in mortgage rates since the financial crisis.

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.