Spain Becomes Second Cheapest Eurozone Country for Mortgages Amid European Rate Hikes
Spain emerges as the Eurozone's second cheapest country for mortgages in late 2024 and early 2025, despite rising rates elsewhere in Europe.
- • Spain holds the second cheapest mortgage rates in the Eurozone at 2.66% as of September 2025.
- • Eurozone average mortgage rates rose from 3.14% to 3.32% in 2025, but Spain's rates decreased.
- • Aggressive pricing by some Spanish banks offering rates below 2% sustains low mortgage costs.
- • Experts warn these low Spanish mortgage rates may not be sustainable in the long term.
Key details
As of September 2025, Spain has distinguished itself as the second country in the Eurozone with the cheapest mortgages, boasting an average interest rate of 2.66%, only behind Malta. This stands in clear contrast to the broader Eurozone trend, where average mortgage rates have increased from 3.14% in January 2025 to 3.32% in recent months.
While European countries face rising mortgage costs following the European Central Bank's interest rate hikes in 2022, Spain has experienced a notable decline in mortgage rates. Spanish mortgage rates have dropped from 2.89% earlier in the year to 2.66%, widening the gap with other major economies across Europe.
This divergence is largely attributed to aggressive pricing strategies by some Spanish banks, offering mortgage interest rates below 2%. Such low rates have been described by others in the sector as "irrational" and potentially unsustainable in the long term. Industry experts suggest that this pricing behavior may soon correct, indicating that finding such attractive mortgage rates could become more difficult in the near future.
Spain's unique banking dynamics thus enable it to buck the general European trend of rising mortgage costs, marking it as a standout in the housing finance market within the Eurozone.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.