Mortgage rates across the eurozone's four largest economies have kept climbing since August, though the latest European Central Bank rate hike is affecting each country differently. Brokers say the decision was largely anticipated, but persistent inflation and elevated market rates mean further increases are likely.
Quoted fixed rates now range from around 2.2% in Spain to an average of 4.46% in Germany, although these figures cover different mortgage terms and are not directly comparable. The divergence reflects how each national market responds to ECB policy, government bond yields, and local competition.
France: fixed rates heading toward 4%
In France, the average rate on a new 20-year fixed mortgage rose by 10 basis points in early September, from 3.44% in August to about 3.54%, according to Pierre Chapon, co-founder of mortgage broker Pretto. He said banks had already factored in the ECB's move but could raise rates again before the next meeting.
“We expect the same range of increase next month as the inflation trend continues,” Chapon said, referring to a possible rise of another 10–20 basis points. France is overwhelmingly a fixed-rate market, with such products accounting for 99.6% of new housing loans, according to the latest Banque de France data.
Pretto projects that the average 20-year fixed rate could reach 3.8%–4% by year-end if inflation does not ease. A rise from 3.54% to 3.9% would add about €37 to the monthly repayment on a new €200,000 mortgage over 20 years, increasing the total interest bill by roughly €8,930. Despite this, French banks are not tightening lending conditions, thanks to strong balance sheets, cheap deposits, and fierce competition in a subdued market.
Italy: variable-rate borrowers feel the pinch
Italian variable-rate mortgages will see a more immediate impact. Nicoletta Papucci, marketing director at MutuiOnline.it, expects the average nominal rate (TAN) on new 20- and 30-year variable-rate mortgages to rise from about 2.80% in early September to around 3.05% in the coming weeks. A 25-basis-point increase would add roughly €25 to the monthly repayment on a €200,000 variable-rate mortgage with 20 years remaining, equivalent to just under €6,000 in extra interest over the period.
Fixed-rate mortgages, which made up 92.2% of Italian applications in 2026, track long-term euro interest-rate swaps more closely than individual ECB decisions. 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 banks had already raised rates on various fixed products by 10 to 40 basis points during August and early September, partly due to rising government bond yields and higher swap rates. Green mortgages, once among the most competitively priced, have also been affected. Papucci noted that a significant part of the repricing had already occurred before the ECB's decision, but she has not seen widespread increases in deposit requirements or major restrictions on credit.
Spain: rates below 3% but set to rise
Spanish fixed mortgage rates remain below 3%, but brokers expect some lenders to adjust their offers upward. A large part of the latest hike had already been priced in because Euribor, the benchmark for many Spanish mortgages, had anticipated the ECB's move 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—fixed for a period before becoming variable—have increased from about 1.85% to roughly 2%–2.1%.
Laura Martinez, a spokesperson for iAhorro, said 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, though others may raise rates by a more moderate 0.2 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 reflects the full year-on-year rise in Euribor, not just the ECB's latest 25-basis-point increase. Borrowers with Euribor-linked mortgages due for review in September will feel the increase first; those reviewed between October and December could see repayments rise by around €100 a month if Euribor stays above 3.1%.
Competition among Spanish banks 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.
The ECB's decision, while widely expected, continues to filter through national mortgage markets at different speeds. For borrowers, the key takeaway is that rates are likely to keep rising in the near term, especially in France and Spain, while Italian variable-rate holders face immediate increases. As eurozone inflation accelerates, the pressure on household budgets is set to intensify.
