19 January 2025 | By John Busby
March 25 European Mortgage market update
March 25 European Mortgage market rates
European Mortgage Market Update
Interest Rate Update: Eurozone and Switzerland
Eurozone: Further Rate Cuts Support Lending
The European Central Bank (ECB) has lowered its main deposit rate by another 0.25%, bringing it down to 2.5%. This follows a similar cut earlier in the year and comes as eurozone inflation holds at 2.4%, slightly above the 2% target. Market forecasts and Euribor swap rates point toward further easing, with another reduction expected in the coming months (possibly by the April meeting).
These cuts have created a favourable lending environment across the eurozone with Spain, Italy and Portugal all boasting long-term fixed rates under 3%.
Switzerland: Competitive Rates Amid Caution
Switzerland remains an attractive financing hub, with the Swiss National Bank (SNB) maintaining a measured approach to monetary policy. At just 0.5%, the SNB’s policy rate is far below eurozone levels, and with low inflation and a stable labour market, policymakers are keeping a cautious, gradual stance on any rate changes.
Swiss residents continue to enjoy historically low borrowing costs; domestic mortgage rates are below most eurozone levels, and some lenders even offer loans financing Italian property purchases for Swiss residents in CHF up to 60% LTV without extra collateral.
European Mortgage Market Rates and Indices
| Market indicators | Local 20 year fx | Private bank rates |
|---|---|---|
| 3-month Euribor: 2.49% | France: 3.8% | 3-year fix: 3.3% |
| 5-year swap rate: 2.14% | Italy: 2.7% | 5-year fix: 3.5% |
| 15-year swap rate: 2.45% | Spain: 2.7% | 20-year fix: 3.8% |
| Average margin: 1.30% | Portugal: 2.9% | Euro variable: 3.8% |
| Swiss Base Rate: 0.5% | Swiss: 1.5% | Swiss variable: 1.5% |
These rates are widely available for US and UK based buyers usually at 70% LTV. These rates are a general guide, indicative and subject to client circumstances. Private banking deals will require a minimum of 30%-50% of the loan amount in assets under management. Traverse arranges purchase and refinancing deals in the above locations. For more accurate rates, please get in touch by either replying to this email or via the website.
Case Study: Refinance to Release Funds
The story opens:
A couple in Paris sought to refinance their €10M property to reduce the substantial €6M pledge tied to their investment portfolio. They aimed to free up funds for additional real estate investments while still maintaining adequate collateral for the existing loan.
Traverse closes:
We identified a lender willing to provide up to 75% LTV on the property—around €7.5M—and combined it with a €2.5M Lombard loan. Because the portfolio’s 85% LTV was primarily in bonds, the total pledge was cut from €6M to just over €3M, freeing up capital for further acquisitions.