Mortgage rates have continued to climb across the eurozone’s four biggest economies since August, although the effect of the European Central Bank’s latest interest-rate increase varies significantly between countries.
Quoted fixed rates now range from around 2.2% in Spain to an average of 4.46% in Germany, although the figures cover different mortgage terms and are therefore not directly comparable.
The ECB’s latest increase was largely priced into mortgage offers before it was announced, brokers said. Banks in France, Italy and Spain had already anticipated the decision, while German mortgage rates continued to follow 10-year government bond yields more closely.
The increases follow a sharp rise in sovereign bond yields examined by Euronews Business in August. Higher government borrowing costs have already fed into mortgage offers in Germany and, indirectly, Italy, while French and Spanish rates remain more closely linked to ECB expectations.
French mortgage rates could approach 4%
French mortgage rates rose by 10 basis points in early September, taking the average rate on a new 20-year fixed mortgage from 3.44% in August to around 3.54%, according to Pierre Chapon, co-founder of mortgage broker Pretto.
Chapon said banks had already priced in the ECB’s decision but could raise rates again before the central bank’s next meeting.
“We expect the same range of increase next month as the inflation trend continues,” he said, referring to a possible rise of another 10–20 basis points.
France is an overwhelmingly fixed-rate mortgage market, with such products accounting for 99.6% of new housing loans in the latest available Banque de France data.
Pretto said the average rate on a 20-year fixed mortgage could reach 3.8%–4% by the end of the year if inflation does not ease.
A rise from the current 3.54% to 3.9% would add about €37 to the monthly repayment on a new €200,000 mortgage over 20 years. It would also increase the total interest bill by approximately €8,930.
French banks are not tightening their lending conditions, according to Pretto. It said strong balance sheets, relatively cheap deposits and fierce competition in a subdued mortgage market were helping to protect borrowers.
Italian variable-rate borrowers face a quicker impact
In Italy, the ECB increase is expected to have a more immediate effect on variable-rate mortgages.
“Following today’s decision, we expect the average nominal interest rate, or TAN, on new 20- and 30-year variable-rate mortgages to rise from approximately 2.80%, recorded during the first weeks of September, to around 3.05% over the coming weeks,” Nicoletta Papucci, marketing director at MutuiOnline.it, told Euronews Business.
A 25-basis-point increase would add approximately €25 to the monthly repayment on a €200,000 variable-rate mortgage with 20 years remaining, assuming it is passed through in full. That is equivalent to just under €6,000 in additional interest over the period.
Fixed-rate mortgages, which accounted for 92.2% of Italian mortgage applications in 2026, respond more closely to long-term euro interest-rate swaps than to individual ECB decisions.
Nevertheless, MutuiOnline expects the average rate on new 20- and 30-year fixed mortgages to rise from 3.46% in August to about 3.75% by the end of 2026. On a new €200,000 mortgage over 20 years, that would add around €30 to the monthly repayment and approximately €7,200 to the total interest bill.
Italian mortgage pricing had already been affected by rising government bond yields and, more directly, by higher long-term swap rates. Banks raised rates on different fixed-rate products by between 10 and 40 basis points during August and early September.
The increases also affected green mortgages, “which had previously been among the most competitively priced products”, Papucci said.
A significant part of the repricing had therefore taken place before the ECB’s decision. However, MutuiOnline has not observed widespread increases in deposit requirements or significant restrictions on credit.
Spanish mortgage rates could rise further
Fixed mortgage rates in Spain remain below 3%, but brokers expect some lenders to increase their offers following the ECB decision.
A significant part of the latest rise had already been priced into fixed-rate offers because Euribor, the benchmark used for many Spanish mortgages, had anticipated the ECB’s move several weeks earlier.
Since the previous ECB increase in June, rates on popular 30-year fixed mortgages have risen from around 2%–2.5% to approximately 2.2%–2.8%, according to Spanish mortgage broker iAhorro.
Initial rates on mixed mortgages — which are fixed for a certain period before becoming variable — have increased from around 1.85% to approximately 2%–2.1%.
Spokesperson Laura Martinez told Euronews Business that “several lenders will likely revise their mortgage products upward in the coming weeks”.
She expects increases of up to 0.5 percentage points at some banks, although others may raise rates by a more moderate 0.2 percentage points or hold them steady to attract customers and meet year-end sales targets.
For a €200,000 mortgage over 30 years, iAhorro calculated that the rise in Euribor from 2.172% in September 2025 to a provisional 3.101% in September 2026 would increase repayments by €98.92 a month, or €1,187.03 a year.
That calculation reflects the full year-on-year rise in Euribor, rather than the effect of the ECB’s latest 25-basis-point increase alone.
Borrowers with Euribor-linked mortgages due for review in September will feel the increase first. Those reviewed between October and December could follow, with repayments rising by around €100 a month if Euribor remains above 3.1%.
Competition between Spanish banks nevertheless remains strong. At iAhorro, mixed-rate products accounted for 52% of completed mortgages in August, with almost all the remainder on fixed rates and variable-rate products representing a negligible share.
German mortgages continue to follow Bund yields
German fixed mortgage rates continue to be driven more by government bond yields and other long-term market rates than by individual ECB decisions.
“The markets had already priced in the second rate hike this year, so it had no impact on government bond yields and, consequently, on mortgage rates,” Michael Neumann, chief executive of Dr Klein Privatkunden, told Euronews Business.
Dr Klein said its best available rate for a 20-year mortgage had risen from 3.99% to 4.24% over the previous month. For a €200,000 mortgage, this would add about €42 to the monthly repayment.
Neumann nevertheless expects mortgage rates to stabilise and move broadly sideways over the rest of the year.
Another brokerage in Germany, Interhyp, said its average rate for a 20-year fixed mortgage had risen from 4.32% in mid-August to 4.46%. “Since the outbreak of the Iran conflict at the end of February, rates for 20-year fixed-rate mortgages have increased by around 0.5 percentage points, from approximately 3.9% to around 4.4%.”
Interhyp attributed the increase to inflation concerns, elevated energy prices and geopolitical uncertainty, which have pushed up long-term bond yields and lenders’ funding costs.
It said the outlook remained highly uncertain: its panel of experts was almost evenly divided between those expecting German mortgage rates to rise, remain stable or decline by the end of the year.
Despite the higher cost of borrowing, both German brokers said demand for home ownership remained strong. However, rising rates and high transaction costs were making purchases increasingly difficult to afford.