Interest rates in Germany have doubled and tripled over the past two years. If you’re holding, buying, or even just thinking about property, rising interest rates in Germany – real estate investors need to pay attention. Why? Because interest doesn’t just eat into your cash flow — it also opens doors for potential tax savings.
Let’s break down how interest rates really impact your portfolio in Germany and what you can do about it.
Interest Rates = Cash Flow Killer (or Booster)
When you buy a property with financing, your interest payments are often the largest monthly cost. A small change in rates can mean hundreds of euros more — or less — in cash flow every month.
Example:
- Loan: €400,000
- Term: 25 years
At 2% interest → Monthly payment ≈ €1,700
At 4.5% interest → Monthly payment ≈ €2,220
That’s €520/month gone from your profit.
And for many investors, that’s the difference between cash-positive and cash-negative.
The Good News: You Can Deduct It
In Germany, loan interest is 100% tax-deductible — as long as the property is rented out.
So while higher interest hurts your cash flow, it also:
- Lowers your taxable rental income
- Enhances your AfA + interest deduction combo
- Can offset income from other properties
If you’re paying €10,000/year in interest, that entire amount reduces your rental income — potentially saving you thousands in taxes.
💡 Pro tip: The more precisely you track your loan terms, interest payments, and property performance, the stronger your tax strategy.
Use Immojourney’s Asset Manager to automatically track interest, depreciation, and all portfolio KPIs — no spreadsheets needed.
What Smart Investors Are Doing Now
✅ Running cash flow simulations before committing to a mortgage
✅ Tracking every euro of interest and AfA
✅ Locking in fixed rates strategically
✅ Keeping reserves for unexpected increases
✅ Getting expert guidance through 1:1 Real Estate Coaching
Conclusion: Rising Interest Rates in Germany – Real Estate Strategy Matters
Rising interest rates in Germany – real estate investors who don’t prepare will feel the pain. Interest rates shape financing costs, tax impact, and overall profitability.
Whether you’re evaluating a new purchase or reviewing your current portfolio, tracking your numbers precisely is key. That’s where tools like Immojourney make the difference — helping you understand, optimize, and grow your investment performance.
Ready to take control of your finances?
Start your free trial with Immojourney’s Asset Manager today — and navigate interest rate changes with confidence.
