24 July 2025 | By John Busby
July 25 European Mortgage market update
ECB Holds and Swiss rates drop to zero
European Mortgage Market Update
Interest Rate Update: Eurozone and Switzerland
Eurozone: ECB Holds Rates Amid Cooling Inflation, trade concerns and a stronger Euro.
The European Central Bank (ECB) held its main deposit rate steady at 2.00%, marking the end of eight consecutive cut since June 2024. This decision reflects the ECB's assessment that inflation is now under control and signals a change to a wait-and-see approach as the Euro gains in strength.
Market indicators, including Euribor swap rates, suggest expectations for only one more rate cut this year, with projections of the deposit rate reaching 1.75% by year-end which would mean rates closer to 3% across many European jurisdictions.
Switzerland: SNB back to zero rates
The Swiss National Bank (SNB) lowered its policy rate by 0.25% during its June 2025 meeting, following a series of cuts aimed at countering low inflation and economic uncertainties.
Swiss mortgage rates continue to be extremely attractive, with 5-year fixed rates ranging between 1% and 1.25%, and 10-year fixed rates between 1.25% and 1.5%. Some lenders are also offering financing options for Swiss residents purchasing property in neighbouring countries, such as Italy, with loans in CHF up to 60% LTV without additional collateral requirements.
European Mortgage Market Rates and Indices
| Market indicators | Local 20-year fx | Private bank rates |
|---|---|---|
| 3-month Euribor: 1.97% | France: 3.9% | 3-year fix: 3.3% |
| 5-year swap rate: 2.12% | Italy: 3.6% | 5-year fix: 3.3% |
| 15-year swap rate: 2.7% | Spain: 2.85% | 20-year fix: 3.9% |
| Average margin: 1.30% | Portugal: 2.9% | Euro variable: 3.3% |
| Swiss Base Rate: 0% | Swiss: 1.5% | Swiss variable: 1.2% |
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 and has finance guides to each destination
Case study: Financing a property near Bordeaux without finance clause
The story opens
This client was seeking to take out 50% finance on a property which the vendor did not want to allow a suspending clause for finance as part of the purchase agreement. The client was also seeking a loan on an interest only basis as he did not want to liquidate certain investments.
Traverse closes
We identified a mortgage option in France which did not require the borrower to place any assets with the bank. This €1.2M mortgage had the possibility of a 5-year interest only period before switching over to repayment. As the purchase was being made through an SARL, the rate was increased to 4.6% fixed for 25 years with no life insurance required. We worked with the client to have all of the required documents and obtained an approval from the underwriters before the signature of the purchase contract.