The ECB may raise rates again on 29 October. What it means for mortgages in Bulgaria and Greece

This year, news from Frankfurt started affecting us directly. The European Central Bank has already raised rates twice, and it meets again on 29 October. Many clients ask me: "Venera, will my mortgage get more expensive? Should I wait?" Let's look at the numbers calmly.

What happened in 2026

After several years of cuts, the ECB changed direction. In June it raised rates by 0.25 points, and on 10 September by another 0.25. The ECB deposit rate now stands at 2.5%.

The main reason is inflation: energy has become more expensive again, and oil is back above $100 a barrel. Under the ECB's new forecast, inflation will only return to its 2% target at the end of 2027.

The next decision is due on 29 October. Market pricing at the end of September put the chance of another hike at around 60%. Some bank analysts expect the next step in December.

Euribor has already risen

For a buyer, what matters more than the ECB rate itself is Euribor — the index many euro area loans are tied to. And it has already reacted:

• on 2 January 2026, 12-month Euribor was 2.245%;
• on 23 October, it was 3.267%.

That is a rise of more than a full point in ten months. If your loan has a variable rate linked to Euribor, your payment will go up at the next reset.

Bulgaria: the euro and still-cheap mortgages

Bulgaria joined the euro area on 1 January, so ECB decisions now affect it directly. But there is good news: mortgages here are still among the cheapest in Europe.

• The average rate on new home loans in August was 2.42% (Bulgarian National Bank data).
• For comparison, the euro area average in April was 3.43%.

Why? Bulgarian banks usually price loans off their own local index, which depends on the cost of deposits, and banks have plenty of liquidity. So the ECB effect arrives slowly, with a delay of six months to a year.

Opinions differ on how far rates will rise. The head of ERA Bulgaria sees a rise of 0.5–0.7 points in 2027 as most likely. A representative of First Investment Bank expects very little — about 0.1 points.

Let's take a €100,000 loan over 25 years:

• at 2.42%, the payment is about €445 a month;
• if the rate rises by 0.7 points — about €480;
• at 3.5% — about €501.

So that's €35–55 more a month. Unpleasant, but not a disaster.

Greece

In Greece, mortgages are already more expensive: in April the average rate on new loans was 3.32%, close to the euro area average. Many of these loans are tied to Euribor, so ECB hikes are felt faster there than in Bulgaria.

Many foreign buyers purchase in Greece with their own funds, especially for the Golden Visa. For them, the ECB rate matters more indirectly: pricier credit may slightly cool demand from local buyers.

What this means for buyers

I wouldn't expect expensive credit to crash prices. In the second quarter, homes in Bulgaria became 15.5% more expensive year on year, while transactions in the third quarter fell by 22%. The market is slowing, not falling. My advice:

1. If you need a mortgage, don't delay. Rates in Bulgaria are still low, but the direction is clear.
2. Ask about a fixed rate. Many banks fix the rate for the first years. Right now that is good insurance.
3. Build in a buffer. Check that the payment would still be comfortable if the rate rose by 1 point.
4. Compare banks. The difference between offers can be noticeable.

If you like, I can help you run the numbers on your purchase and tell you which banks in Bulgaria and Greece work with foreign buyers.