In 2023, reports began to surface that Poland had the highest mortgage rates in the European Union. However, at that time, Hungary held the top spot with a slightly higher average interest rate. Now, the situation has changed. Analysts from RynekPierwotny.pl have taken a closer look and researched why Polish mortgages are currently considered the most expensive in the EU.
A previous analysis in December 2023 showcased the shifting landscape. However, significant changes have since occurred, and in April of this year, among the 27 EU countries, Hungary no longer claims the highest rates, having been overtaken by Poland, whose April rate of 7.72 percent is a slight increase from December’s 7.67 percent.
This unenviable rise to the top in terms of new mortgage interest rates is attributed to a series of rate cuts in Hungary from January to April, which continued thereafter. Despite these reductions, Hungary’s average rate in April still stood high at 6.80 percent, starkly contrasting against the EU average of 4.44 percent.
The gap widens even further against countries like Malta at 2.01 percent, Bulgaria at 2.49 percent, Belgium at 3.43 percent, and France at 3.49 percent — with Poland’s rates clearly delineating a significant disparity.
Interest rates on new mortgages are a critical issue for those looking to purchase homes. From the perspective of those already holding mortgages, however, a comparison of older mortgages across the EU might be more relevant. In terms of the average interest rate on repaid mortgages, Poland also led in April 2024 with a rate of 7.62 percent, barely ahead of Romania’s 7.56 percent. High rates were also noted in Estonia at 5.97 percent, Lithuania at 5.90 percent, Latvia at 6.13 percent, and Hungary at 5.80 percent.
On the other end, countries like France at 1.70 percent, Germany at 1.98 percent, Belgium at 2.15 percent, and Slovakia at 2.22 percent boast the lowest mortgage rates. Factors such as membership in the eurozone and a high proportion of fixed-rate mortgages secured during periods of lower financing costs contribute to these favorable rates.
Considering the current statistics, the question arises whether Poland will remain the EU leader for high mortgage rates in the coming months. Unfortunately, this scenario seems likely, especially for new mortgage agreements. There is a significant chance that the first rate cuts by the National Bank of Poland might not occur until 2025, an essential signal for the housing market as well.
