17 April 2025 | By John Busby
April 25 European Mortgage market update
April 25 European Mortgage market rates
European Mortgage Market Update
Interest Rate Update: Eurozone and Switzerland and Wealth Report 2025
Eurozone: ECB Cuts Rates Amid Cooling Inflation and Trade Concerns
The European Central Bank (ECB) has reduced its main deposit rate by 0.25 percentage points to 2.25 per cent. This is the sixth consecutive cut since June 2024 as policymakers respond to easing inflation and heightening trade tensions. Eurozone inflation fell to 2.2 per cent in March, edging closer to the ECB’s 2 per cent target.
Market indicators, including Euribor swap rates, point to further monetary easing, with projections that the deposit rate could fall to 2.00 per cent—or even 1.75 per cent—by year-end. This trajectory continues to foster a favourable lending environment: long-term fixed mortgage rates in Spain, for instance, are now below 3 per cent. By contrast, France’s 10-year OAT yield has climbed following changes to German fiscal rules, prompting some local lenders to raise pricing.
Switzerland: SNB Maintains Low Rates Amid Economic Uncertainty
The Swiss National Bank (SNB) has left its policy rate unchanged at 0.25 per cent after a series of earlier cuts aimed at countering low inflation and wider economic risks. With price pressures still subdued and global headwinds persistent, the SNB is expected to keep rates steady in the near term.
Swiss mortgage pricing remains compelling: five-year fixes hover between 1.30 per cent and 1.45 per cent, while ten-year fixes range from 1.45 per cent to 1.65 per cent. Several lenders also finance Swiss residents buying in neighbouring countries—such as Italy—offering loans in CHF to 60 per cent LTV without the need for extra collateral.
European Mortgage Market Rates and Indices
| Market indicators | Local 20-year fx | Private bank rates |
|---|---|---|
| 3-month Euribor: 2.25% | France: 3.8% | 3-year fix: 3.2% |
| 5-year swap rate: 2.11% | Italy: 2.7% | 5-year fix: 3.4% |
| 15-year swap rate: 2.59% | Spain: 2.7% | 20-year fix: 3.9% |
| Average margin: 1.30% | Portugal: 2.9% | Euro variable: 3.55% |
| Swiss Base Rate: 0.5% | Swiss: 1.5% | Swiss variable: 1.3% |
These rates are widely available for US- and UK-based buyers—typically at 70 per cent LTV. They are indicative only and remain subject to each client’s circumstances. Private-bank transactions usually require assets under management of 30–50 per cent of the loan amount. Traverse arranges purchase and refinancing deals in all of the above jurisdictions.
Case Study: Back to Balearics
The story opens:
A UK farmer wished to acquire a €5 million rental property in Mallorca. Local retail banks declined to lend because most of the client’s income was retained within the farming business, leaving limited personal income documentation.
Traverse closes:
We sourced a lender prepared to view the farming-business income as sufficient, structuring the deal as a commercial rental operation. A Spanish SL (Sociedad Limitada) was incorporated to purchase the property. The client placed €2.5 million with the bank for asset management, enabling a €5 million mortgage. The loan was agreed on a five-year term at 1.4 per cent over Euribor—around 3.6 per cent variable at signing.