diff --git a/generators/server/index.js b/generators/server/index.js
index 03c72351..b64ae991 100644
--- a/generators/server/index.js
+++ b/generators/server/index.js
@@ -195,11 +195,8 @@ module.exports = class extends BaseGenerator {
         ];
         this.generateMainJavaCode(configOptions, mainJavaTemplates);
 
-        const mainResTemplates = [
-            'application.properties',
-            'application-local.properties',
-            'logback-spring.xml'
-        ];
+        const mainResTemplates = this._getResourceFileTemplates(configOptions)
+
         this.generateMainResCode(configOptions, mainResTemplates);
 
         const testJavaTemplates = [
@@ -214,13 +211,35 @@ module.exports = class extends BaseGenerator {
         }
         this.generateTestJavaCode(configOptions, testJavaTemplates);
 
-        const testResTemplates = [
-            'application-test.properties',
-            'logback-test.xml'
-        ];
+        const testResTemplates = this._getResourceFileTestTemplates(configOptions)
+
         this.generateTestResCode(configOptions, testResTemplates);
     }
 
+    _getResourceFileTestTemplates(configOptions) {
+        let testResYamlTemplates = []
+
+        if (configOptions.propFileFormat === 'yaml') {
+            testResYamlTemplates = ['application-test.yml']
+        }
+        else {
+            testResYamlTemplates = ['application-test.properties']
+        }
+        return [...testResYamlTemplates, 'logback-test.xml']
+    }
+
+    _getResourceFileTemplates(configOptions) {
+        let mainResTemplates = []
+
+        if (configOptions.propFileFormat === 'yaml') {
+            mainResTemplates = ['application.yml', 'application-local.yml']
+        } else {
+            mainResTemplates = ['application.properties', 'application-local.properties']
+        }
+
+        return [...mainResTemplates, 'logback-spring.xml']
+    }
+
     _generateDbMigrationConfig(configOptions) {
         if(configOptions.dbMigrationTool === 'flywaydb') {
             let vendor = configOptions.databaseType;
diff --git a/generators/server/prompts.js b/generators/server/prompts.js
index 3521639d..6e3bba98 100644
--- a/generators/server/prompts.js
+++ b/generators/server/prompts.js
@@ -123,6 +123,21 @@ function prompting() {
                 }
             ],
             default: 'maven'
+        },
+        {
+            type: 'list',
+            name: 'propFileFormat',
+            message: 'which format do you want to use for configuration files?',
+            choices: [
+                {
+                    value: 'props',
+                    name: 'Property File'
+                },
+                {
+                    value: 'yaml',
+                    name: 'YAML'
+                }
+            ]
         }
     ];
 
diff --git a/generators/server/templates/app/src/main/resources/application-local.yml b/generators/server/templates/app/src/main/resources/application-local.yml
new file mode 100644
index 00000000..3d0c1971
--- /dev/null
+++ b/generators/server/templates/app/src/main/resources/application-local.yml
@@ -0,0 +1,31 @@
+<%_ if (databaseType === 'postgresql') { _%>
+spring:
+  datasource:
+    driver-class-name: org.postgresql.Driver
+    url: jdbc:postgresql://localhost:5432/appdb
+<%_ } _%>
+<%_ if (databaseType === 'mysql') { _%>
+  datasource:
+    driver-class-name: com.mysql.jdbc.Driver
+    url: jdbc:mysql://localhost:3306/appdb
+<%_ } _%>
+<%_ if (databaseType === 'mariadb') { _%>
+  datasource:
+    driver-class-name: org.mariadb.jdbc.Driver
+    url: jdbc:mariadb://localhost:3306/appdb
+<%_ } _%>
+  datasource:
+    username: appuser
+    password: secret
+
+<%_ if (features.includes('localstack')) { _%>
+###AWS
+  cloud:
+    aws:
+      region:
+        static: us-east-1
+      credentials:
+        secret-key: noop
+        access-key: noop
+      endpoint: http://localhost:4566
+<%_ } _%>
diff --git a/generators/server/templates/app/src/main/resources/application.yml b/generators/server/templates/app/src/main/resources/application.yml
new file mode 100644
index 00000000..6668a527
--- /dev/null
+++ b/generators/server/templates/app/src/main/resources/application.yml
@@ -0,0 +1,66 @@
+spring:
+  application:
+    name: <%= appName %>
+  main:
+    allow-bean-definition-overriding: 'true'
+  jmx:
+    enabled: 'false'
+  mvc:
+    problemdetails:
+      enabled: 'true'
+server:
+  port: '8080'
+  shutdown: graceful
+
+################ Actuator #####################
+management:
+  endpoints:
+    web:
+      exposure:
+        include: configprops,env,health,info,logfile,loggers,metrics,prometheus
+  endpoint:
+    health:
+      show-details: always
+
+################### Database ###################
+spring:
+  jpa:
+    open-in-view: 'false'
+    show-sql: 'false'
+    hibernate:
+      ddl-auto: none
+    properties:
+      hibernate:
+        jdbc:
+          time_zone: UTC
+          batch_size: '25'
+          lob:
+            non_contextual_creation: 'true'
+        query:
+          fail_on_pagination_over_collection_fetch: 'true'
+          plan_cache_max_size: '4096'
+          in_clause_parameter_padding: 'true'
+        generate_statistics: 'false'
+        order_inserts: 'true'
+        connection:
+          provider_disables_autocommit: 'true'
+        order_updates: 'true'
+  datasource:
+    hikari:
+      data-source-properties:
+        ApplicationName: ${spring.application.name}
+      auto-commit: 'false'
+  data:
+    jpa:
+      repositories:
+        bootstrap-mode: deferred
+
+<%_ if (dbMigrationTool === 'flywaydb') { _%>
+  flyway:
+    locations: classpath:/db/migration/{vendor}     
+<%_ } _%>
+
+<%_ if (features.includes('elk')) { _%>
+application:
+  logstash-host: localhost
+<%_ } _%>
diff --git a/generators/server/templates/app/src/test/resources/application-test.yml b/generators/server/templates/app/src/test/resources/application-test.yml
new file mode 100644
index 00000000..c7dd4e02
--- /dev/null
+++ b/generators/server/templates/app/src/test/resources/application-test.yml
@@ -0,0 +1,11 @@
+<%_ if (features.includes('localstack')) { _%>
+spring:
+  cloud:
+    aws:
+      region:
+        static: us-east-1
+      credentials:
+        secret-key: noop
+        access-key: noop
+      endpoint: http://localhost:4566
+<%_ } _%>