European homeowners face rising mortgage costs until 2030

Homeowners in the euro area will face rising mortgage costs until at least 2030, despite declining interest rates, according to the European Central Bank (ECB). Many borrowers who secured low-rate loans must remortgage in the coming years, leading to reduced consumption as households tighten their budgets. While the ECB has cut its key deposit facility rate from 4% to 2.25% since June 2024, the majority of mortgages, particularly fixed-rate ones, will continue to be affected by higher rates established during the era of elevated borrowing costs.

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