Updated 25 October 2026

Mortgage Rates by Country 2026: Where Buying a Home Costs the Most

Quick answer: Mortgage rates vary hugely between countries in 2026. Borrowers pay the most in Latin America, at about 10% to 11.5% in Mexico and Brazil, followed by the United States (7.32% for a 30-year fixed on 22 October, up from 5.98% before the Iran war), India (about 7.25%), Australia (about 6.5% for an average variable loan) and the United Kingdom (6.00% for an average five-year fix, the highest since 2023). Euro area rates are much lower, at 3.60% on average for new loans in August 2026, from 1.9% in Malta and 2.4% in Bulgaria to more than 4% in Germany and the Baltic states. Switzerland (about 1.1%) and Japan (about 1.45% variable) remain the cheapest places to borrow, although Japanese rates are rising. Rates have risen almost everywhere since February as inflation from higher energy prices pushed central banks and bond markets up. The interactive table below lists 32 countries, with the monthly payment per 100,000 borrowed.

Mortgage rates are reported very differently around the world: Americans quote 30-year fixed rates, Britons quote two- and five-year fixes, most of continental Europe quotes a mix of variable and long fixed rates, and Australians mostly borrow at variable rates. This guide brings together the official euro area statistics from the European Central Bank with the main benchmarks in other countries, and explains why rates differ so much and what it means for your monthly payment.

Mortgage rates by country (2026)
Typical interest rates on new home loans, with the change since the Iran war began and the monthly payment per 100,000 borrowed. Sort by any column, filter by region, and tap a country for details.
CountryType of loanRate
BrazilCaixa lowest rate, 202611.19%
MexicoBank fixed rates, 202610.8%
United States30-year fixed, 22 Oct 20267.32%
IndiaBank home loans, 20267.25%
AustraliaAverage variable, Oct 20266.49%
United Kingdom5-year fixed, 5 Oct 20266%
Canada5-year fixed, big bank, Oct 20265.14%
LatviaNew home loans, August 20264.35%
EstoniaNew home loans, August 20264.27%
LithuaniaNew home loans, August 20264.16%
GermanyNew home loans, August 20264%
NetherlandsNew home loans, August 20263.91%
SlovakiaNew home loans, August 20263.73%
BelgiumNew home loans, August 20263.7%
LuxembourgNew home loans, August 20263.63%
AustriaNew home loans, August 20263.61%
Euro area averageNew home loans, August 20263.6%
ItalyNew home loans, August 20263.58%
IrelandNew home loans, August 20263.52%
China5-year LPR, Oct 20263.5%
CyprusNew home loans, August 20263.39%
GreeceNew home loans, August 20263.3%
FinlandNew home loans, August 20263.24%
SloveniaNew home loans, August 20263.22%
FranceNew home loans, August 20263.2%
SpainNew home loans, August 20263.04%
PortugalNew home loans, August 20263.03%
CroatiaNew home loans, August 20262.91%
BulgariaNew home loans, August 20262.42%
MaltaNew home loans, August 20261.94%
JapanVariable rate, Oct 20261.45%
SwitzerlandSARON mortgage, 20261.1%
32 countries shown; median about 3.61%
Euro area: European Central Bank, composite cost of borrowing for house purchase, new loans, August 2026 (February 2026 for comparison). US: Freddie Mac Primary Mortgage Market Survey. UK: Moneyfacts. Other countries: central banks, lenders and comparison sites as noted; rates depend on the borrower, deposit and fixed period, so treat them as typical rather than exact.

Why Mortgage Rates Differ So Much

Four things explain most of the gap between countries:

Four factors behind mortgage rates: central bank rates, inflation, the fixed period and competition
The four main reasons the same loan costs more in one country than another.
  • Central bank rates. Mortgage rates move with each country's policy rate and its expected path. The Swiss National Bank's rate is 0% and the Bank of Japan's 1.25%; the European Central Bank's rates are well below the US Federal Reserve's, which rose again in September 2026; and Brazil's policy rate is in double digits.
  • Inflation. Lenders demand higher rates where inflation is higher or less predictable, which is why Latin American and Indian rates are well above European ones.
  • Length of the fixed period. A 30-year fixed rate, as in the US, costs more than a variable rate or a short fix, because the lender takes on more risk. Variable rates in Australia, Spain and Portugal follow short-term rates closely.
  • Competition and regulation. Banking competition, the cost of funding, deposit requirements and how easy it is to repossess homes all affect the margin lenders charge.

The United States: Above 7% Again

The average US 30-year fixed rate, measured weekly by Freddie Mac, was 5.98% in the last week of February 2026, just before the war began. It rose through the summer and climbed sharply from September, as the Federal Reserve raised rates and 10-year Treasury yields went above 5%, reaching 7.40% in mid-October and easing to 7.32% on 22 October. The 15-year fixed rate is 6.68%.

Line chart of the US 30-year fixed mortgage rate rising from 5.98% in February 2026 to 7.32% in October
Freddie Mac's average 30-year fixed rate, roughly monthly readings; it peaked at 7.40% in mid-October.

On a $400,000 loan, the rise from 6% to 7.3% adds about $350 to the monthly payment, or more than $120,000 in interest over 30 years. Our guide Should You Buy a House With Mortgage Rates Above 7%? (Rent vs Buy Calculator) works through whether to buy or wait, with a rent-versus-buy calculator.

The United Kingdom: Fixes Near 6%

British borrowers usually fix for two or five years and then remortgage. According to Moneyfacts, the average five-year fixed rate reached 6.00% on 5 October 2026, the highest since September 2023, and the average two-year fix was 5.98%. The number of fixed deals priced below 5% fell from 1,494 at the start of September to just nine by early October, as swap rates, which lenders use to price fixes, rose.

That matters most for the hundreds of thousands of households whose fixed deals end each year. Someone coming off a 2021 fix at around 1.5% faces a payment rise of several hundred pounds a month on a typical loan.

The Euro Area: Lower, but Rising

The ECB's composite cost of borrowing for house purchase, which averages new loans of all fixed periods, was 3.60% in August 2026, up from 3.37% in February. Rates rose in most countries, by the most in Lithuania, Estonia and Finland, where many loans are linked to Euribor, the short-term euro interbank rate. In Greece, Croatia and Malta, rates edged down.

Bar chart of August 2026 mortgage rates across the euro area, from 1.94% in Malta to 4.35% in Latvia
Cost of borrowing for house purchase, new loans, August 2026.

The differences within the euro area are large despite a single central bank rate:

  • Cheapest: Malta (1.94%), Bulgaria (2.42%), Croatia (2.91%), Portugal (3.03%) and Spain (3.04%). In Malta and Bulgaria, banks have plentiful deposits and compete hard for borrowers.
  • Most expensive: Latvia (4.35%), Estonia (4.27%), Lithuania (4.16%) and Germany (4.00%). German mortgages are typically fixed for 10 years or more, which costs more when long-term bond yields rise.

Other Major Countries

  • Canada: five-year fixed rates are around 4.1% to 4.4% from the cheapest brokers and about 5.1% at big banks, up since September as Canadian bond yields rose. The Bank of Canada has held its rate at 2.25% since October 2025.
  • Australia: the Reserve Bank raised its cash rate to 4.60% on 29 September 2026, the highest since 2008, and the big four banks passed on the full rise, taking the average variable rate to about 6.5%, according to Canstar.
  • Japan: the Bank of Japan raised its rate to 1.25% in September, its second rise in three months. Variable mortgage rates, which most Japanese borrowers use, are expected to rise to about 1.45%, still among the lowest in the world.
  • Switzerland: with the policy rate at 0%, SARON-linked mortgages cost about 1% to 1.5%.
  • China: the five-year loan prime rate, the benchmark for mortgages, has been held at 3.5% for 17 months, and many new mortgages are priced below it as the government supports the housing market.
  • India: bank home loans started at about 7.25% in mid-2026. The Reserve Bank of India raised its repo rate to 5.50% on 7 October, so floating-rate loans linked to the repo rate will rise when they reset.
  • Brazil and Mexico: rates of 10% to 12% reflect high policy rates. Brazil's state-backed Minha Casa Minha Vida programme offers much lower rates to lower-income buyers.

What a Rate Means for Your Monthly Payment

Tap a country in the table to see the monthly payment on 100,000 units of currency borrowed over 25 years (30 years in the US). The differences are dramatic:

Monthly payment on 100,000 borrowed at rates from 1.5% to 11.5%
Monthly payment per 100,000 borrowed over 25 years (*30 years, as in the US).
  • At 1.5% (Japan or Switzerland), 100,000 costs about 400 a month.
  • At 3.6% (euro area average), about 506.
  • At 6.0% (UK five-year fix), about 644.
  • At 7.3% (US 30-year fixed), about 687 over 30 years.
  • At 11.5% (the upper end in Mexico and Brazil), about 1,016.

Each extra percentage point adds roughly 8% to 11% to a 25-year payment at today's rates. Over the life of a loan, a borrower at 7% pays more than twice as much interest as one at 3.5%.

How Mortgages Work in Different Countries

The rate is only part of the picture. Loan terms, deposits and fixed periods differ a lot, and they change how much a rate rise hurts:

  • United States: the 30-year fixed rate is standard, and borrowers can usually repay early without penalty and refinance when rates fall. Payments for existing borrowers do not change when rates rise, which is why higher rates mainly hit new buyers.
  • United Kingdom: loans usually run for 25 to 35 years, but rates are fixed only for two or five years, so most borrowers are exposed to new rates every few years.
  • Canada: terms are usually five years within a 25-year amortisation (30 years for first-time buyers and new builds), so households renew at current rates every five years.
  • Australia and New Zealand: most loans are variable or fixed for only one to three years, so changes in the central bank rate reach household budgets within weeks.
  • Germany, France and the Netherlands: long fixed periods of 10 to 25 years are common, which protects borrowers from short-term rate rises but makes it costly to switch.
  • Spain, Portugal and the Baltic states: many loans are variable and linked to Euribor, so payments rise and fall with ECB policy.
  • Japan: most borrowers choose variable rates on loans of up to 35 years, and many have never experienced a rate rise, which is why the Bank of Japan's increases are closely watched.

Deposits matter too. Lenders in most countries expect 10% to 20% of the price, and many require mortgage insurance or charge higher rates below 20%. Several countries, including the UK, Ireland, the Netherlands and Canada, also limit how much you can borrow relative to your income or test whether you could afford a higher rate.

Fixed or Variable?

Where you have the choice, the decision depends on your budget and your view of rates:

  • Fixed rates give certainty: your payment will not rise for the fixed period. They usually cost more at the start, and leaving early can mean a penalty.
  • Variable rates follow the central bank and short-term market rates. They are often cheaper at first, but payments can rise quickly, as Australians and many Europeans found in 2022–23 and again this year.
  • A useful test: could you still afford the payment if your rate rose by 2 to 3 percentage points? If not, a fixed rate is the safer choice.

With central banks in the US, Australia, Japan and India raising rates in 2026 to fight energy-driven inflation, fixed rates have already moved up, so borrowers are paying for certainty. Our guide Interest Rates Are Rising Again: 7 Money Moves to Make Now covers what rising rates mean for borrowers and savers.

How to Get a Better Rate

  1. Save a bigger deposit. Rates usually fall at loan-to-value thresholds such as 60%, 75% and 80%, and in many countries a deposit below 20% means extra mortgage insurance.
  2. Improve your credit score before applying, by paying down cards and correcting errors. Our guide Why Is My Credit Score Different on Every App? Which One Do Lenders Actually Use? explains which score lenders use.
  3. Use a broker or compare widely. The gap between the best and average rates can be half a percentage point or more.
  4. Start early when remortgaging. In the UK and many other countries you can secure a new deal up to six months before your current one ends.
  5. Consider overpaying. When mortgage rates are higher than savings rates, paying down your loan is a guaranteed return. Our guide Prepay Home Loan or Invest? How to Decide (With Examples) compares overpaying with investing.

Data Notes

Euro area rates are the ECB's composite cost of borrowing indicator for new loans to households for house purchase, which combines loans with all fixed periods, for August 2026, the latest month available, compared with February 2026. The US rate is Freddie Mac's weekly average for 30-year fixed-rate mortgages; the UK rates are Moneyfacts averages across lenders. Rates for other countries are typical rates from central banks, lenders and comparison sites, as noted in the table; they depend on the borrower, deposit and type of loan, and are less precise than the euro area, US and UK figures. Rates will be updated monthly.

Frequently Asked Questions

Which country has the lowest mortgage rates?

Switzerland (about 1% to 1.5%) and Japan (about 1.45% for variable loans) have the lowest rates among major economies. In the euro area, Malta (1.94%) and Bulgaria (2.42%) are cheapest.

Which country has the highest mortgage rates?

Among the countries in our table, Brazil (about 11.2% plus a reference rate) and Mexico (about 10% to 11.5%). Rates are higher still in countries with very high inflation, such as Türkiye and Argentina.

What is the average mortgage rate in the US now?

7.32% for a 30-year fixed loan in the week of 22 October 2026, according to Freddie Mac, and 6.68% for a 15-year fixed loan.

What is the average mortgage rate in the UK?

About 6.00% for a five-year fix and 5.98% for a two-year fix in early October 2026, according to Moneyfacts.

Why are mortgage rates lower in Europe than in the US?

Mainly because the European Central Bank's policy rate is lower than the Federal Reserve's, and because US borrowers typically fix for 30 years, which costs more than the shorter fixed or variable rates common in Europe.

Will mortgage rates fall in 2027?

That depends mainly on inflation and energy prices. If oil and gas supplies return to normal and inflation eases, central banks could start cutting and mortgage rates would follow. If energy prices stay high, rates are likely to stay elevated.

Final Thoughts

Where you live makes a bigger difference to the cost of a mortgage than almost anything else: the same loan can cost twice as much a month in Mexico as in Switzerland, and the gap between the US and the euro area is now more than three and a half percentage points. In 2026, rates have risen almost everywhere as energy prices fed through to inflation.

If you are buying or remortgaging, the practical steps are to stress-test your budget against higher rates, compare widely, consider a fixed rate if a rise would strain you, and start the process early. We will update this table each month.

Sources

Cite this page: Blog Digest, “Mortgage Rates by Country 2026: Where Buying a Home Costs the Most”, updated 25 October 2026, https://randomthoughtsever.blogspot.com/2026/10/mortgage-rates-by-country-2026-where.html

Related Guides

Rates from the European Central Bank, Freddie Mac, Moneyfacts and national sources as noted, checked October 2026. This article is for information and isn't financial advice.