Cost
Mortgage dynamics in 2021 showed a heavy tilt toward variable rates, with floating rate loans representing about a quarter of the total portfolio. By December, that share had slipped to roughly 22.3%, while the broader market had seen a progressive decline since 2016. The European Central Bank kept the reference rate at zero percent, contributing to a period when variable mortgages constituted a majority of new loans only a year earlier. These shifts reflect how lenders navigated softer margins while borrowers benefited from lower near-term costs.
Over time, lenders grew more aggressive in steering clients toward fixed-term mortgages. The aim appeared to be securing steadier payments for the life of the loan, even if the long-term cost rose when the main reference rate was negative. These policy moves, driven by industry pressure to protect margins, reduced demand for floating rate products as institutions sought predictable revenue streams.
Today the situation has shifted noticeably. Euribor has edged back into positive territory, though only slightly, registering about 0.013%. Inflation dynamics and the stance of central authorities have led to expectations that rate increases could come sooner rather than later. The ECB has signaled a potential path toward higher rates, following actions by the U.S. Federal Reserve and the Bank of England. Vice-president Luis de Guindos indicated that the tightening cycle could begin in the near future, possibly this summer.
Looking ahead, AHE expects a gradual uptick in the share of variable rate mortgages as policy environments evolve. Financial institutions may respond by offering a mix of products designed to balance risk and profitability, including features that make fixed-rate options more attractive while keeping variable products competitive. The market is watching closely for how lenders price risk and how borrowers respond to higher reference rates in a rising-rate environment.
Cost
A borrower with a 25-year, 150,000 euro mortgage and one point of interest would incur a commission of 566 euros in the current year, equivalent to about 33 euros more each month if the contract is adjusted with the latest data. Projected analyses published by the HelpMyCash portal indicate a roughly 400-euro annual increase in total payments in this scenario, based on Bankinter analytics. The forecast assumes Euribor finishing the year around 0.40% and rising toward 0.80% in 2023. In the second case, that would push monthly payments from 533 euros to 621 euros, yielding an annual rise of about 1,059 euros in surcharges.
The portal notes that banks pursuing a new policy mix will challenge buyers relying on short to medium-term mortgages. It expects lenders to temper expectations of ultra-cheap fixed rates that persisted in recent years, with fixed rates around 1% proving increasingly scarce. The message is clear: delaying action could invite higher costs as financing conditions tighten and rates climb further.