Euribor in 2026: what it means for mortgages and property in Spain

Euribor in 2026: what it means for mortgages and property in Spain

Euribor is once again a key topic for anyone with a variable-rate mortgage or planning to buy property in Spain. After several months of increases, the main reference index for Spanish variable mortgages ended June slightly below 2.8% and has recently been moving close to 2.7%.

At first glance, this pause may look like good news for buyers. However, the situation remains cautious: current forecasts do not point to an immediate fall in monthly mortgage payments, especially for borrowers whose loans will be reviewed in the coming months.

A more stable Euribor, but still at elevated levels

In recent weeks, the 12-month Euribor fell sharply in daily terms and briefly moved below 2.7%. However, geopolitical tension and economic uncertainty have brought volatility back into the market, pushing the index again towards levels close to or above 2.8% at certain moments.

This shows that Euribor does not depend only on European Central Bank policy. It also reacts to inflation expectations, economic growth, international risk and future decisions on interest rates.

For buyers, the message is clear: the mortgage market may be more stable than during the most stressful periods, but it has not yet entered a phase of clear and sustained declines.

What analysts expect

Current forecasts suggest that Euribor could remain within a relatively narrow range during the rest of 2026.

Bankinter expects the 12-month Euribor to move between 2.65% and 2.75% in the second half of the year, provided the geopolitical situation does not worsen. For 2027, the bank expects a moderation towards levels between 2.55% and 2.65%.

Funcas, meanwhile, places the average annual Euribor at 2.5% for 2026 and 2.4% for 2027. Although these figures suggest some improvement, they do not necessarily mean an immediate reduction in mortgage payments for all borrowers.

Why mortgage payments may not fall yet

One of the key issues is the comparison with the previous year. Even if Euribor stabilises or falls slightly, many variable-rate mortgages are reviewed using the value of the index compared with the same period one year earlier.

If the average for 2025 was lower than the expected level for 2026, some mortgage reviews may not yet result in a lower payment. In some cases, payments may remain stable or even rise slightly, depending on the review month, the agreed spread and the specific conditions of the loan.

For anyone who already has a variable-rate mortgage, it is important to check the exact review date and not focus only on the daily Euribor figure.

What this means for property buyers

For buyers, Euribor remains important, but it is not the only factor. A more expensive mortgage can affect the available budget, the maximum amount that can be financed and the monthly payment that feels comfortable.

Before buying, it is worth analysing:

• the total property price;
• available savings for deposit, taxes and costs;
• the most suitable type of mortgage;
• the monthly payment under different Euribor scenarios;
• income stability;
• community fees, maintenance and local taxes;
• the purpose of the purchase: main home, second residence or investment.

In a market with high property prices, buying with financing requires more planning than during years of very low interest rates. The key is not only to obtain a mortgage, but to ensure that the monthly payment remains sustainable over the medium term.

Housing: a market still under pressure

Beyond Euribor, the Spanish residential market continues to face strong pressure. Limited supply, foreign demand, rising rents and interest in coastal areas continue to support prices.

According to market forecasts, house prices in Spain may continue rising in 2026 and 2027, although at different speeds depending on the area. Major cities, the Mediterranean coast and the islands are expected to lead much of the growth.

This is especially relevant for buyers interested in the Costa Blanca. In areas such as Alicante, Torrevieja, Orihuela Costa, Benidorm, Altea, Calpe and Jávea, international demand remains an important factor.

You can browse available properties, compare new-build properties or review resale properties.

Costa Blanca: financing, demand and location selection

On the Costa Blanca, the impact of Euribor may vary depending on the buyer profile. Some international buyers purchase property without financing or with only partial mortgage financing, while others depend more directly on bank conditions.

This means the market does not move uniformly. Well-located homes, close to the sea, with nearby services and good construction quality may continue to attract demand even in an environment of higher rates.

At the same time, buyers are becoming more selective. They compare areas more carefully, review total costs and pay more attention to energy efficiency, building condition and the potential for personal use or rental.

Fixed, variable or mixed mortgage

In this context, many buyers wonder which type of mortgage may be more suitable. There is no single answer that works for everyone.

A fixed-rate mortgage offers stability, because the monthly payment does not change over the life of the loan. It may suit buyers who prioritise security and predictability.

A variable-rate mortgage may benefit if Euribor falls in the future, but it also involves more uncertainty. It requires the ability to absorb possible increases.

A mixed mortgage combines an initial fixed-rate period with a later variable-rate phase. It can be attractive for some buyers, but it is important to review terms, spreads and conditions carefully.

Before signing, buyers should compare offers and calculate different scenarios, not only the initial monthly payment.

Buying carefully in 2026

The current context does not mean that it is a bad time to buy, but it does require caution. In a market with high prices and financing still sensitive to Euribor, property selection is more important than ever.

A good purchase does not depend only on finding an attractive home. It also depends on whether the price is reasonable, the financing is sustainable and the area has solid fundamentals.

For international buyers, local guidance can help avoid common mistakes: overpaying for a weak location, underestimating costs, failing to review the community properly or misunderstanding the real rental conditions.

Conclusion

Euribor appears to have taken a pause, but it does not yet offer a clear signal of significant reductions in mortgage payments. Forecasts point to gradual stabilisation, with possible moderation in 2027, although the market remains affected by inflation, interest rates and international uncertainty.

For anyone planning to buy property in Spain, especially on the Costa Blanca, the most sensible approach is to analyse the budget carefully, compare mortgage options and choose properties with solid fundamentals.

If you are considering buying a home on the Costa Blanca, Costa Portal AI can help you understand the local market, compare areas and find properties that match your goals.

This article is for general information only and should not be considered legal, tax, financial, mortgage or investment advice.