According to the ECB data for April 2026, borrowers in the Baltic states pay just over twice as much for mortgages as households in Malta. Take out a mortgage in Latvia today — the bank will set the rate at 4.18% per annum. In Malta, for the same loan, you will pay 2.08%.
One currency, one central bank, the same phase of the interest rate cycle, but two families in the euro area face fundamentally different mortgage costs.
This gap — more than two percentage points between the cheapest and most expensive markets — is one of the most noticeable observations in the latest data from the European Central Bank on new housing loans for April 2026.
In Southern Europe, mortgages are cheaper
The average mortgage rate in the euro area, according to the ECB, is 3.43%, taking into account both fixed and floating rate loans across all countries in the bloc.
The lowest rates are concentrated in Mediterranean countries.
Leading the ranking is Malta with a rate of 2.08%, followed by Bulgaria (2.45%), Spain (2.80%), Portugal (2.85%), Croatia (2.95%), and Slovenia (2.99%).
Among the largest economies in the eurozone, Spain and Portugal stand out. Borrowers in these countries pay about one percentage point less than their counterparts in Germany, where new mortgage loans cost an average of around 3.84%.
The Baltic States remain the most expensive
At the opposite end are the Baltic states.
The highest mortgage rate in the eurozone is recorded in Latvia — 4.18%, followed by Estonia (4.05%) and Lithuania (3.88%).
Germany, Belgium, and the Netherlands also have rates above the euro area average.
The real cost of the mortgage gap in Europe
For households, such differences in rates translate into significant differences in monthly payments.
A mortgage of €200,000 for 20 years at the average Maltese rate of 2.08% means a monthly payment of about €1,019.
At Latvia's 4.18%, the same loan will cost about €1,231 per month — more than €200 more.
Over the life of the loan, a borrower in Latvia will pay back nearly €295,000, while in Malta, it will be around €245,000.
The difference in interest will amount to about €50,800 on top of the same amount of debt issued in the same currency.
Why are mortgage rates so different within the eurozone?
The ECB sets a single base interest rate for the entire currency area, but the final price of mortgages is largely determined by national banking systems.
The first factor is the structure of each market and, above all, the prevailing type of loans: fixed or floating rate.
In the Baltic states and Finland, floating rate loans dominate.
According to the ECB, such mortgages account for over 93% of new housing loans in Latvia, Estonia, and Finland compared to just 15% on average in the eurozone.
When interest rates rise, borrowers in countries where floating loans prevail feel it almost immediately.
In France, Spain, and Portugal, on the other hand, fixed rates dominate, allowing families to lock in the cost of the loan for a long time and smoothing the impact of short-term fluctuations.
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