Mortgage rates around 3.5 percent, prices rising slightly again after the correction, rents at record levels: in 2026 buying adds up again, but not everywhere. The rules of thumb that show when ownership pays.
In short
- Price-to-rent ratio: below 25 years of rent favours buying, above 30 favours renting.
- Mortgage payment plus maintenance should not exceed 35 percent of net income.
- At least the closing costs plus ten percent of the price as equity.
- Holding period under ten years: rent, because the closing costs are otherwise not earned back.
The situation in 2026
After the price decline from 2022 to 2024, purchase prices have stabilised and are rising slightly again in the metropolises. Ten-year mortgage rates sit between 3.2 and 3.8 percent, rents in the big cities rise four to six percent a year. The result: in many regions the monthly burden of buying is comparable to rent, and repayment builds wealth while rent is gone. In Munich, Frankfurt and Hamburg, however, renting often remains cheaper.
Rule one: price to annual rent
Divide the purchase price by the annual cold rent of a comparable flat. Below 25 buying is attractive, between 25 and 30 balanced, above 30 favours renting. A flat for €400,000 with €1,200 cold rent sits at 27.8. In Leipzig and Dresden the values are around 24, in Munich above 35.
Rule two: the burden
The payment of interest and repayment plus a maintenance reserve of one euro per square metre a month should not exceed 35 percent of household net income. At €5,000 net that is €1,750. At 3.5 percent interest and 2 percent repayment that carries a loan of around €370,000. Whoever breaches the limit has no room for children, a job change or higher rates after the fixed period.
Rule three: equity
The closing costs of 8 to 13 percent must come from your own pocket, plus at least ten percent of the price. At €400,000 in North Rhine-Westphalia that is around €45,000 of closing costs plus €40,000, so €85,000. More equity lowers the rate noticeably: between 60 and 80 percent loan-to-value there is often half a percentage point.
The holding period
The closing costs are lost and only amortise through appreciation and saved rent. Whoever stays less than ten years almost always does better renting. Whoever stays 20 years owns a paid-off home at the end; the tenant has bank statements. The calculation tips towards buying the longer the horizon.
What the calculator does not show
Ownership ties you: to a place, a condition, neighbours. It costs time for management, tradesmen and owners’ meetings. In return it offers peace from termination and rent increases and rent-free living in old age. Whoever wants or needs to stay mobile rents and invests the difference in a portfolio. That is not a worse decision, just a different one.
Try it yourself
Mortgage CalculatorPrice, federal state, equity, rate and repayment: monthly payment, closing costs and remaining debt after the fixed-rate period.Loan CalculatorLoan amount, rate, term: monthly instalment, total interest and repayment schedule, also for refinancing.Frequently asked questions
Are prices too high in 2026?
Measured against rents they are high in metropolises, reasonable in mid-sized cities and the east. The price-to-rent ratio of your region tells you.
Should I wait for falling rates?
When rates fall, prices rise. The timing cannot be optimised, your own resilience can.
How much equity is ideal?
Closing costs plus 20 percent of the price get the best rates. Less works but costs rate and safety.
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