Mortgage costs are rising sharply across the U.S. and Europe as the economic fallout from the Middle East conflict spreads into global housing markets, increasing pressure on homebuyers and borrowers despite central banks holding interest rates steady.
According to a Financial Times report published Monday, the average U.S. 30-year fixed mortgage rate has climbed to 6.36%, moving above levels seen before the Federal Reserve began cutting rates in 2025. The report said lenders are reacting to rising government borrowing costs and growing fears that inflation could accelerate again if oil prices remain elevated.
In Germany, mortgage rates on popular 10-year home loans have risen to around 3.6%, increasing annual interest costs on a new €350,000 loan by roughly €1,000, according to retail mortgage broker Dr Klein cited by the Financial Times.
“Rates have risen sharply within a matter of weeks,” Florian Pfaffinger, an executive at German mortgage broker Dr Klein, said, adding that the moves had “unsettled the market.”
The sharpest increases were reported in the UK, where the average quoted rate on a two-year fixed mortgage climbed to 5.1% in April from 3.97% at the end of February.
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