How mortgage rates moved in Europe in 2026

For most of 2025 the story of European mortgages was simple: central banks were cutting and loans were getting cheaper. In 2026 the story split in two. The European Central Bank raised rates twice, while Poland's central bank cut once and then paused. If you are buying with a mortgage this autumn, which side of that split you are on changes your numbers.

All figures below are official or come from the sources listed at the end, with the date of each reading.

The euro area: two hikes after a long pause

The ECB had brought its deposit facility rate down to 2.00% by June 2025 and kept it there into 2026. Then energy prices rose sharply after the conflict in the Middle East. Euro-area inflation reached 3.2% in May 2026, the highest since 2023.

The ECB reacted in two steps:

In September the ECB projected inflation at 3.0% for 2026, 2.5% for 2027 and 2.1% for 2028, with growth of only 0.9% this year. It said it is not pre-committing to a particular path. The next decision is due on 29 October 2026.

What it did to euro mortgages

Mortgage rates follow market expectations more than single decisions, so they moved gradually. The ECB's composite cost of borrowing for new house-purchase loans was:

• 3.51% in June 2026
• 3.54% in July 2026
• 3.60% in August 2026, the latest reading, published on 1 October

By the period for which the rate is fixed, August looked like this:

The floating rate rose fastest because it reacts to the policy rate directly. Long fixed rates are still the cheapest option on average, which is unusual and tells you markets expect short-term rates to stay higher for a while.

What this means for a payment. For a €200,000 loan over 25 years, the monthly payment is about €1,002 at 3.51% and €1,012 at 3.60%. At the floating average of 3.86% it is about €1,040. The rise is real but small so far. The bigger risk is for variable-rate borrowers if the ECB continues to raise rates.

Poland: one cut, then a pause

Poland started 2025 with a reference rate of 5.75%. Between May and December 2025 the Monetary Policy Council (RPP) cut it in six steps, by 1.75 points in total, to 4.00%. In March 2026 it cut once more, to 3.75%, in force since 5 March. At its meetings since then, most recently on 6–7 October 2026, it left rates unchanged.

The rate most Polish mortgages actually follow is WIBOR 3M. On 14 October 2026 it stood at about 3.90%. A variable-rate mortgage costs WIBOR plus the bank's margin, so the rate you pay is several points above the euro-area average even after the cuts.

Lending has picked up. According to the NBP's report on the second quarter of 2026, banks signed 29.5 billion zł of new mortgages in that quarter, 26.8% more than a year earlier. The share of new homes bought without a loan fell to about 45%.

Banks have also become more careful about how much they lend. Market reports describe stricter creditworthiness rules from the Polish Financial Supervision Authority (KNF) taking effect in June 2026, with banks checking real household spending more closely. If you are close to your maximum loan, ask the bank to recalculate before you sign a reservation.

What this means for a payment. As an illustration, a zł 500,000 loan over 25 years costs about zł 3,146 a month at 5.75%. If the rate rose by one point to 6.75%, the payment would be about zł 3,455, roughly zł 309 more. Your offer will differ: the margin depends on the bank, your down payment and your income.

Fixed or variable in 2026

In Poland, most banks offer a rate fixed for five years (okresowo stała stopa), after which it is reset. The reference index for variable loans is WIBOR, which is due to be replaced by POLSTR over the coming years.

A few rules of thumb that hold in both markets:

1. Fixing buys certainty, not a discount. In the euro area a long fixed rate is currently cheaper than a floating one. In Poland, compare the fixed offer with WIBOR plus margin on the same day.
2. Stress-test the payment. Add one and two percentage points to the rate and check that you can still pay comfortably.
3. Look at the total cost. The annual percentage rate (RRSO in Poland) includes fees and insurance. Two offers with the same interest rate can differ by thousands.
4. Watch the dates. The ECB decides next on 29 October 2026; the RPP meets on 3–4 November. A single decision rarely changes fixed offers overnight, but variable rates follow within months.

If you are a foreigner buying in Poland

Polish banks lend to foreigners with a residence permit and income in Poland, usually with a down payment of at least 20%, or 10% with additional insurance. The bank will want stable income history and documents in Polish. Our guide on mortgages in Poland for foreigners covers the documents, and the full cost calculator adds notary, court fees and finishing to your budget.

Before you choose a flat, check the project as well as the loan: who the developer is, whether payments go to an escrow account, and what was verified and when. Havkey shows every check with its date in the catalogue.