ECB Lowers Rates to 2.5%: Good News for the Mortgage Market
The European Central Bank (ECB) has announced a new interest rate cut, setting it at 2.5%. This decision marks the sixth reduction in the past nine months and directly benefits those with a mortgage or looking for financing to buy a home.
How This Rate Cut Affects the Mortgage Market
The ECB’s monetary easing is improving mortgage conditions in the banking sector. The Euribor is expected to continue decreasing in the short term, allowing buyers to access more affordable loans. Additionally, financial institutions will keep adjusting their offers to attract customers, particularly for fixed and mixed-rate mortgages.
Currently, major banks are already offering fixed-rate mortgages below 2.7%, with institutions like Evo Banco, Santander, and Sabadell standing out, offering interest rates between 2.45% and 2.50% with maximum bonuses. Other banks such as Openbank, CaixaBank, BBVA, Unicaja, and Bankinter have also adjusted their terms, though some limit maximum terms to 20 years.
For mixed-rate mortgages, offers with an initial fixed period below 2% are available, although banks tend to limit this period to the first 3-5 years of the loan. Evo Banco, Cajamar, and Ibercaja stand out in this segment. As for variable-rate mortgages, although their demand has declined, the most competitive spreads are around 0.50% + Euribor with bonuses.
Future Outlook
Experts predict that the downward trend in interest rates will continue as long as inflation remains under control. The Spanish Mortgage Association (AHE) states that Euribor will evolve in line with monetary policy, allowing banks to keep improving their mortgage offers.
While market trends will depend on economic and geopolitical factors, all indications suggest that 2025 will be a good year for those looking to buy a home and take advantage of better financing conditions. If you’re considering purchasing a property, now could be the ideal time to do so.
