Mortgage Rates Rise: How Much and How Quickly Payments Will Increase

The rise in EURIBOR has once again become the number one topic for everyone with a mortgage. And although decisions from the European Central Bank are still ahead, rates have already started to rise — which means loan payments are increasing.

In recent weeks, the six-month EURIBOR has risen from about 2.2% to 2.5%. At first glance, this is just a few tenths of a percent, but it is quite noticeable for family budgets.

In Latvia, according to Citadele Bank, the total volume of mortgage loans issued in 2025 was €86.06 million, with an average loan amount of about €87,700 for a term of 23 years. In practice, this means that for such a loan with a term of 25 years, the monthly payment at 2% EURIBOR would be about €458, at 2.5% it would be about €483, at 3% it would be about €508, and at 4% it would be around €560. The difference between 2% and 4% exceeds €100 per month, which is already a significant burden for many.

Financial markets expect that the European Central Bank will raise rates several more times this year. The logic is clear: inflation remains a problem, so money must become more expensive. However, the economy is not in the best shape to easily withstand a sharp tightening.

The Eurozone is just beginning to emerge from stagnation, and Germany, the largest economy in the region, is still teetering on the brink of recession. Businesses are behaving cautiously, consumers are spending less, and wage growth is slowing. In such conditions, a sharp increase in rates could slow down the economic recovery.

Therefore, not all experts are confident that market forecasts will fully materialize. There is a possibility that rate hikes will be more moderate. Moreover, inflation now largely depends on external factors — energy prices, geopolitical situations, and supply chain disruptions, which are only weakly influenced by interest rates.

For the residents of Latvia, this means a simple thing: mortgage payments are likely to rise, but not necessarily sharply. Nevertheless, even an increase of several dozen euros per month is already noticeable for the budget, so it is important to consider such changes in advance.

The main conclusion is that there is no need to panic, but the situation cannot be ignored either. The rise in EURIBOR has already begun, and it will gradually reflect in payments. However, the most likely scenario is a moderate increase rather than a sharp jump.