Where are the eurozone's cheapest and highest mortgage rates?

Borrow to buy a home in Latvia today, and the bank will charge you 4.18%. Do the same in Malta, and you will pay 2.08%.

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Same currency, same central bank, same stage of the interest-rate cycle, yet two eurozone households face mortgage costs that are worlds apart.

That gap — more than two percentage points between the cheapest and most expensive markets — is one of the most striking findings in the latest European Central Bank data on new home loans, covering April 2026.

Mortgage rates are cheaper in Southern Europe

The average eurozone mortgage rate stood at 3.43%, according to ECB figures, combining both fixed- and variable-rate loans across member states.

The lowest rates are concentrated around the Mediterranean.

Malta tops the ranking at 2.08%, followed by Bulgaria (2.45%), Spain (2.80%), Portugal (2.85%), Croatia (2.95%) and Slovenia (2.99%).

Among the eurozone's largest economies, Spain and Portugal stand out. Borrowers in those countries are paying roughly one percentage point less than their counterparts in Germany, where new mortgages cost 3.84%.

Baltics remain the most expensive

At the other end of the spectrum are the Baltic states.

Latvia records the highest mortgage rate in the eurozone at 4.18%, followed by Estonia (4.05%) and Lithuania (3.88%).

Germany, Belgium and the Netherlands also sit above the eurozone average.

The real cost of Europe's mortgage divide

For households, these gaps in mortgage rates translate into substantial differences in monthly payments.

A €200,000 mortgage over 20 years at Malta's average rate of 2.08% results in monthly repayments of roughly €1,019.

At Latvia's 4.18%, the same loan costs approximately €1,231 per month — more than €200 extra every month.

Over the life of the loan, the Latvian borrower would repay nearly €295,000, compared with about €245,000 in Malta.

The difference amounts to roughly €50,800 in additional interest for exactly the same amount borrowed in the same currency.

Why are mortgage rates so different inside the eurozone?

The ECB sets a single benchmark interest rate for the entire currency bloc, but mortgage pricing remains largely determined by national banking systems.

The first factor is the structure of each market, and above all, whether borrowers take fixed or variable rates.

In the Baltic countries and Finland, variable-rate loans dominate.

According to ECB data, variable-rate mortgages account for more than 93% of new home loans in Latvia, Estonia and Finland, against just 15% across the eurozone as a whole.

When interest rates rise, borrowers in countries where variable rates dominate feel the impact almost immediately.

In France, Spain and Portugal, by contrast, fixed rates prevail, letting households lock in their costs for years and muffling the pass-through from short-term swings.

Competition among domestic banks also matters.

Smaller banking sectors with fewer lenders tend to exhibit wider lending margins. The Baltic markets are relatively concentrated, which can limit competitive pressure on mortgage pricing.

Funding structures play a role, too. Banks in some countries rely more heavily on wholesale funding markets, while others benefit from large domestic deposit bases that can support cheaper lending.

Malta's place at the foot of the table is nothing new.

Experts often point to intense competition among Maltese banks, abundant domestic deposits and a relatively stable property market as factors helping to keep mortgage rates low.

The country also has a much lower share of variable-rate lending than the Baltic states, insulating borrowers from rapid changes in ECB policy rates.

A reminder that monetary union is not a financial union yet

The ECB's data highlights a paradox at the heart of the euro project.

While monetary policy is centralised in Frankfurt, the transmission of that policy remains highly fragmented.

For homebuyers, that means location still matters enormously.

A family purchasing a home in Riga may pay more than twice the interest rate charged to a household in Valletta, despite borrowing the same currency under the same central bank.

Three decades after the euro's creation, the cost of buying a home remains one of the clearest examples of how national financial borders continue to exist within the monetary union.