Mortgages 2026: Are interest rates rising again?

The Mortgage Market heading into 2026: What should we expect?

The Costa del Sol remains one of Europe's most attractive property destinations, but for many of our clients at Alros Inmobiliaria, the burning question is: is now the right time to buy? As we look towards 2026, the mortgage market is entering a phase of transition.

Euribor trends: Stability or further hikes?

After the period of monetary tightening by the ECB to curb inflation, we have experienced months of moderation. However, volatility remains. Forecasts for 2026 suggest a "neutral rate" scenario. This means that while we are unlikely to see the negative rates of a few years ago, drastic hikes are also not expected unless an unforeseen macroeconomic shock occurs.

• Stabilisation: The market expects the Euribor to hover between 2.5% and 3.25%.
• Bank competition: Spanish banks are very active, offering increasingly competitive products to attract solvent clients.

What does this mean for Costa del Sol buyers?

Buying in Marbella, Estepona, or Benalmádena requires a robust financial strategy. With the Euribor seemingly having reached its peak, hybrid mortgages (mixed-rate) have become the preferred option. These allow for a fixed rate during the first few years, providing peace of mind, and transitioning to a variable rate when interest rates are expected to have settled even lower.

Alros Inmobiliaria's recommendations for 2026

1. Analyze your risk profile: Don't focus solely on the interest rate, but on a monthly repayment that allows you to live comfortably.
2. The importance of savings: Although financing is improving, banks remain strict regarding the 20-30% deposit plus closing costs.
3. The value of location: On the Costa del Sol, a prime location is always a safe investment. Do not sacrifice location to save a small percentage on your mortgage.

The real estate market: A solid bet

Despite rate fluctuations, demand on the Costa del Sol has not slowed down. International buyers (particularly from the UK, Scandinavia, and Germany) continue to see Spain as a safe haven. The scarcity of new builds in prime areas keeps prices rising, offsetting the cost of financing.

Conclusion: Buy now or wait?

Our recommendation at Alros is clear: the best time to buy is when you find the right property. Trying to time the mortgage market perfectly is almost impossible. If you have financial stability and have found your ideal home, current conditions for 2026 are, by historical standards, manageable.

Do you need personalised advice? At Alros Inmobiliaria, we connect our clients with the best local banking institutions to ensure the most favourable mortgage conditions possible.