Fixed vs. variable interest rates – what’s safer in Germany?

Short answer: In Germany, a fixed interest rate is usually safer than a variable one because it locks your mortgage payment for 5–30 years and shields you from European Central Bank hikes.

Fixed vs. variable interest rates – what’s safer in Germany? German lenders overwhelmingly issue fixed-rate (Festzins) mortgages: more than 80 % of new loans in 2024 locked rates for at least ten years. A fixed deal secures today’s mortgage interest for the entire Zinsbindung period, so your monthly payment stays predictable even if the ECB lifts base rates again. Variable (flexibel) loans follow the three-month Euribor; they start 0.3 %–0.5 % cheaper but can climb quickly, and very few banks offer them to non-EU buyers because of the higher risk profile. If you still favour flexibility, a hybrid “10-plus-10” product lets you refinance or exit after the first decade without penalty.

At Finance for Expats we compare both structures in our mortgage calculator, model break-even points, and show how a 1 percentage-point rate jump would impact your net income. Most expat clients choose a 10- or 15-year fix, then reassess when the initial term matures.

Key take-aways:

• Fixed rates dominate the German market and protect against ECB hikes.
• Variable loans start cheaper but can rise each quarter and are rarely offered to non-EU borrowers.
• Finance for Expats models both scenarios and finds the right balance of security and flexibility.