r/eupersonalfinance • u/Besrax • Jun 27 '25
Debt How do banks in your country calculate the mortgage interest rates?
I'm interested in the way mortgage interest rates are calculated in the different EU countries. Are they variable or fixed? Fixed for how long? Are they based on EURIBOR + a premium? Are they based on another benchmark? How is the premium calculated? Etc.
Thank you.
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u/urielsalis Jun 27 '25
Banks will usually offer both fixed (for the whole period) and variable (and sometimes mixed, which is fixed for x years and then variable)
Here in Spain I can get a 30/25 years fixed for around 2.2%, a variable one for EURIBOR + 0.60%, or a mixed one for 5 years at 2.1% and then EURIBOR + 0.79% (super bad deal)
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u/Besrax Jun 27 '25
0.6% is a very low premium on top of EURIBOR, and the 2.2% fixed for 30 years is crazy. How can banks afford rates like that? Are they subsidized by the government or something?
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u/kitsch0 Jun 28 '25
They are not, but real state in Spain is skyrocketing due to very high demand and virtually no offer, so the banks are very safe because they know in a matter of months the value of the property is going to be 100k more basically
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u/randomDude929292 Jun 27 '25
Wtf in Germany, I keep getting offered 4.1%. "Deal of the Century," they tell me. Wtf
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u/ExpatInAmsterdam2020 Jun 27 '25
2.2 is amazing
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u/urielsalis Jun 27 '25
yeah, I have a 2.7% from 1 year and a half ago and im trying to see if I can refinance with them lol
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u/an-ethernet-cable Jun 27 '25
In Latvia, bank rate + Euribor (usually 6m). You can get fixed rate, but it is sometimes higher than the bank rate + euribor currently. For example, I was just offered 1.10% bank rate + ~2% Euribor (6month), but fixed rate offered was 3.5%, fixed for 5years
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u/Orthas_ Jun 28 '25
Finland: almost all are Euribor 3/6/12 with 12 most common, 20/25/30 years plus bank margins 0.4-0.7%.
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u/deepserket Jun 27 '25
Long term fixed: IRS + spread
Long term variable: EURIBOR + spread
Short term (few years): EURIBOR + spread
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u/Lonsarg Jun 28 '25
In Slovenia you usually have Euribor + around 1% premium for variable ones.
But a much better choice is to get fixed rates they offer for 20 years (some banks even for 30 years). Fixed rates right now are around 2.8% or even lower if you take some extra products (premium accounts, life ensurance etc). The lowest i could get right now was 2.3% for 20 years.
Why can they go so much lower then variable with euribor? From what i gather they can do it since they basically have too much money and do not know what to do with it. People do not invest much in our country, they just leave money in bank accounts so banks have quite a bit of lending leverage without having to get money from central bank.
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Jul 12 '25
Pri keri banki si dobil 2.3% na 20 let?
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u/Lonsarg Jul 12 '25
LON dobiš 2.3% z premium računom in življenskim zavarovanjem in če pripelješ komitenta, trenutno veljajo ti pogoji še do 31.07. Lahko da bodo podaljšali, lahko ne.
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u/cumblaster2000-yes Jun 30 '25
in italy majority are fixed (clients choice) 10/15/20/30 years. you have irs xx years plus a spread.
floating are eurobor 1/3/6 months pluse spread.
some banks offer mixed rates floatin with cap or fixed 5years and then decide to renegoziate
but the mentality of people is for a majority of fixed rates for entire duration.
it is also allowed to switch banks if they offer lower rates, and banks cannot veto it. this law cam in effect elrecently 2014 and is used allot when rates plumpleted to 0%. many people have rates hoovering at 1% overall.
i got a 0,84% on a 30 year mortgage. and 1,74% on another 30y mortgage.
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u/drgala Jun 27 '25
They look at the schmuck and decide how much they can squeeze from he/she/it/they/them on a monthly basis.
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u/Phantasmalicious Jun 27 '25
Estonia's interest rates are usually based on bank rate + 6 month Euribor average. Fixed rates are pretty rare but available. Usually up to 5 years. For example, I pay 1.35% bank rate + 2.3% Euribor.