The European Central Bank raised its deposit facility rate to 2.50% on Sept. 10, bringing borrowing costs back into focus for households and businesses across the eurozone.

The 25-basis-point increase was the ECB's second rate hike of 2026, following its June increase. The move comes as eurozone inflation remains above the central bank's 2% target, with higher energy prices linked to the war involving Iran adding to inflationary pressure.

Higher ECB rates can have an impact on mortgages, personal loans, business financing and savings accounts. Here’s what you need to know.

Why did the ECB raise interest rates?

The ECB's mandate is to keep prices stable, with a medium-term inflation target of 2%. Raising interest rates is one of its main tools for controlling inflation. Higher rates make borrowing more expensive, which can reduce household spending and business investment. They can also encourage people to save rather than spend. Over time, weaker demand can ease pressure on prices.

The current situation is complicated by the fact that much of the inflation increase is coming from energy. Higher interest rates cannot lower the price of oil or gas directly, but the ECB can use monetary policy to limit the risk that an energy shock spreads into broader price increases through wages, services and consumer demand.

The ECB has said it will continue to assess the intensity and duration of the energy shock and its wider effects on inflation.

ECB rates and Euribor: How are they connected?

If you have a mortgage in Spain, Euribor is probably more important to you than the ECB's headline deposit rate. The ECB sets official interest rates for the eurozone, whereas Euribor is a benchmark for euro interbank lending rates, with maturities including one month, three months, six months and 12 months.

The ECB's deposit facility rate influences the overnight euro rate, known as €STR. Euribor also reflects expectations about where short-term interest rates are heading, along with market conditions and risk.

Essentially: ECB policy → market expectations → Euribor → borrowing costs

This is why Euribor can move before the ECB changes rates.

What higher ECB rates mean for mortgage rates in Spain

How higher ECB rates affect Spanish households depends on their financial products, particularly the type of mortgage rate they have.

Variable-rate mortgages are commonly linked to Euribor. The interest rate is generally calculated as Euribor plus a fixed spread set by the bank, with the mortgage rate reviewed at regular intervals. If Euribor rises, the interest rate on a variable mortgage can increase at the next review, pushing up the monthly payment. The impact depends on factors including the outstanding balance, remaining term, mortgage spread and the Euribor rate used in the contract.

Existing fixed-rate mortgage holders are generally protected from changes in Euribor because their contractual interest rate does not change.

Mixed-rate mortgages combine an initial fixed-rate period with a variable-rate period. If you're still within the fixed-rate period—which can last five or 10 years depending on the mortgage — a rise in Euribor won't immediately affect your payment, but you'll take on that risk when the loan switches to its variable rate. If your fixed period has already ended, your mortgage is already exposed to Euribor and future changes in interest rates.

New borrowers may face higher borrowing costs as banks price new mortgages according to funding costs, market rates, competition and expectations for future interest rates.

If you're on a variable-rate mortgage and your payments have become more expensive, you may consider refinancing or switching to a fixed-rate mortgage for greater certainty over your repayments.

Whether that makes sense depends on your individual circumstances, including your current interest rate, remaining loan term and the costs of changing your mortgage.

Read more about the advantages and disadvantages of fixed, variable and mixed-rate mortgages here.

You can also use our Spain mortgage calculator to see how different interest rates and loan amounts could affect your monthly payment.

Will savings accounts pay more when ECB rates rise?

When Euribor rises, you might expect banks to increase the rates they pay on savings accounts. But that's not always the case.

Each bank has their own pricing strategies. For instance, a bank that needs more deposits may offer a competitive savings rate to attract customers, while another with plenty of funding may have little incentive to pay more. 

Banks also use savings rates to target particular customers. A high rate might be available only to new customers or require a salary deposit, direct debits or a certain balance. This might explain why fintechs and digital banks can sometimes offer particularly competitive savings rates, as they attempt to attract customers away from traditional banks.

For this reason, any savvy saver should shop around (and hop around) for the best savings accounts in Spain for the most competitive yield and conditions.

When comparing offers, pay attention to the TAE, not just the headline rate. Learn what that means with our TAE, TIN and APR guide.

Also check:

• Maximum balance eligible for the advertised rate

• Promotional period

• Salary or direct-debit requirements

• Withdrawal restrictions

• What rate applies after any introductory offer ends

A higher ECB rate creates an opportunity for savers, but you may need to move your money to benefit from it.

Personal loans could become more expensive

Higher ECB rates can also put upward pressure on the cost of consumer credit. Personal loans, car finance and other forms of borrowing are priced by individual lenders, so they don't move automatically with the ECB rate. However, higher funding costs can influence the rates banks and other lenders offer to new borrowers.

Existing fixed-rate personal loans generally won't change when the ECB raises rates. If you're taking out a new loan, compare the TAE and total amount repayable, not just the monthly payment. A small difference in the interest rate can add up over several years.

For those with high unpaid credit card balances, it’s highly advisable to focus on paying them down as the high interest rate can make the debt unmanageable. Rewards such as cashback can be valuable, but carrying a balance at a high interest rate can quickly outweigh those benefits.

See our guide to the best credit cards in Spain for a comparison of rewards, costs and benefits.

Businesses will feel higher borrowing costs, too

Businesses that operate on variable-rate debt will see their financing costs rise as their loans reset. Many businesses run on loans to finance equipment, inventory, property, expansion and working capital.

Refinancing costs can be higher too as a business that borrowed several years ago at a lower rate could face significantly higher costs when that debt matures. It’s important for owners to run a diagnostic on your balance sheet to determine your financial strategy forward.

Look at:

• When existing loans mature

• Whether rates are fixed or variable

• The benchmark used for variable-rate debt

• Upcoming financing requirements

• Current debt payments

• Available cash reserves

Liquidity can become particularly valuable in a higher-rate environment. Having enough cash available can help a business cover expenses or weaker periods without relying on expensive short-term borrowing.

Higher rates can squeeze household budgets

A household paying more on a variable mortgage has less disposable income for other spending and saving. Higher borrowing costs can also make it harder for people to build an emergency fund or invest.

This will have a major impact on households in Spain, where housing and everyday living costs already take up a significant share of many household budgets.

What happens next?

Most economists surveyed by Reuters before the September meeting expected the 2.50% rate to hold through at least mid-2027. More recently, Deutsche Bank has forecast another 25-basis-point increase in December if energy-related inflation remains persistent.

The uncertainty is largely driven by the US-Iran war. If the conflict eases and energy prices stabilize, the ECB will have less reason to keep tightening, particularly if higher rates begin to weigh on economic growth. If the war drags on or intensifies, sustained energy-price pressure could keep inflation above the ECB's 2% target for longer.

In a nutshell: What higher ECB rates mean for your finances

Plan your finances

Higher ECB rates do not necessarily spell trouble to your finances. It’s important to review your financial position, readjust your monthly budgets or speak to a financial advisor if you have to consider any tax implications.

More importantly, shop around!

Perhaps it’s a good time to refinance your mortgage or loan, or hop to a higher-yield savings account. Business owners should review debt and liquidity before higher financing costs become a problem.

No one can predict the future, but you can absolutely take steps in ensuring you’re ready for to take on any challenges ahead.