MADRID – Spain’s mortgage market is entering a new period of uncertainty. Despite the renewed rise in Euribor, several lenders are trying to keep their most attractive offers competitive. However, banks are simultaneously protecting themselves from interest-rate risk by adjusting other products, particularly mixed mortgages.

The changing environment surrounding mortgage rates in Spain comes after Euribor reversed part of its previous decline. The benchmark is particularly important because millions of variable-rate mortgages in Spain are directly or indirectly linked to it.

Official Banco de España data show that the one-year Euribor stood at 2.245% in January 2026. By June, the officially published rate had climbed to 2.798%.

That increase creates a difficult balancing act for Spanish lenders: remain competitive enough to attract new borrowers while avoiding taking excessive interest-rate risk.

Mortgage Rates in Spain Resist Euribor Pressure

A higher Euribor would normally create pressure for banks to increase mortgage pricing.

However, competition between Spanish lenders means that repricing does not necessarily happen immediately or equally across every mortgage category.

Banks compete aggressively for financially strong customers, particularly borrowers with stable employment, high income and relatively low loan-to-value ratios.

As a result, some institutions can choose to maintain attractive headline rates temporarily even when underlying market conditions become less favourable.

That does not mean borrowers are completely insulated from the Euribor increase. Instead, banks can adjust pricing elsewhere or tighten the conditions required to qualify for their best rates.

Mixed Mortgages Become a Defensive Tool

Mixed-rate mortgages are particularly important in the current environment.

These products combine two structures. Borrowers initially pay a fixed interest rate for a predetermined period before the mortgage switches to a variable rate, usually calculated using Euribor plus a spread.

This allows borrowers to obtain payment stability during the first years while retaining exposure to future Euribor movements.

But it also creates interest-rate risk for lenders during the fixed portion of the mortgage.

Banco Santander, for example, currently advertises a mixed mortgage with a fixed period lasting five and a half years before the loan switches to a variable rate linked to Euribor. Its offer available until August 15 begins at a 2.34% nominal annual rate during the first six months, subject to the product’s conditions.

Other lenders have similarly structured products.

Unicaja’s mixed mortgage, for example, provides an initial fixed period followed by a variable rate. Its published illustration uses the one-year Euribor plus a spread once the fixed period ends.

These structures show why mixed mortgages can become one of the first places where lenders adjust pricing when expectations for interest rates change.

Variable Mortgage Borrowers Face Greater Exposure

The situation is different for variable-rate mortgages.

Once the introductory period ends, repayments generally move according to Euribor plus the bank’s contractual spread.

Unicaja’s current variable mortgage provides a clear example. Its published conditions include an initial fixed rate followed by one-year Euribor plus 1.65 percentage points without bonuses. Using the officially published 2.798% Euribor figure, the resulting nominal rate in its example reaches 4.45%.

Therefore, existing borrowers whose mortgages are scheduled for revision can feel the impact of rising Euribor more directly than customers holding conventional fixed-rate loans.

The actual change in monthly payments depends on the outstanding balance, remaining term, contractual spread and the Euribor value used at the revision date.

Competition Prevents an Immediate Mortgage Price Shock

Competition remains one of the strongest forces restraining mortgage rates in Spain.

Mortgages are valuable products for banks because they can establish relationships with customers lasting decades. Lenders frequently combine their best mortgage rates with requirements involving salary deposits, insurance policies, cards or other financial products.

Consequently, banks have incentives to avoid becoming significantly more expensive than competitors.

Instead of imposing a large increase across their entire mortgage catalogue, institutions can respond selectively.

That may include increasing the fixed portion of mixed mortgages, adjusting spreads, reducing discounts or applying stricter conditions before customers receive the advertised rate.

Euribor Remains the Key Variable

The direction of Euribor will largely determine what happens next.

If the benchmark continues climbing, maintaining today’s mortgage pricing will become progressively more difficult for lenders.

Banks could then have to choose between accepting lower margins or transferring more of the increased financing cost to new borrowers.

If Euribor stabilises or begins declining again, competitive pressure could allow attractive mortgage offers to remain available for longer.

This uncertainty also explains why comparing only the headline interest rate can be misleading.

Borrowers need to examine the annual percentage rate, fixed-rate period, subsequent Euribor spread, insurance requirements, early repayment costs and other conditions before deciding which mortgage is cheaper over the long term.

Spanish Mortgage Market Enters a New Phase

The latest developments do not mean that every Spanish bank has literally frozen its mortgage prices. Rather, they show that competition has so far prevented the Euribor increase from translating uniformly into higher headline rates across the market.

At the same time, mixed mortgages provide banks with an important mechanism for managing the risks created by changing interest-rate expectations.

The result is an increasingly segmented market. Attractive offers can still be found, but the conditions attached to them and the pricing of mixed products deserve closer attention.

For homebuyers, the evolution of mortgage rates in Spain during the coming months will depend on two competing forces: the upward pressure created by Euribor and the intense competition among banks for new mortgage customers.