The average interest rate on housing loans in Estonia continued to rise in the second quarter of 2026, according to the latest interest rate statistics published by Eesti Pank.
The average interest rate on secured housing loans reached 3.93% in the second quarter, extending the upward movement seen earlier this year. The increase follows a period in which borrowing costs had fallen substantially from their previous highs.
The change is also visible in the monthly data. Eesti Pank reported at the end of June that the average interest rate on new housing loans had risen to 4%, confirming that financing costs for homebuyers had been moving higher during the spring.
The latest development contrasts with 2025, when falling interest rates brought significant relief to borrowers. Eesti Pank said earlier this year that the average interest rate on new housing loans had fallen by 1.4 percentage points during 2025, while the average interest margin remained at around 1.5%, its lowest level of the past decade. Most new housing loans in Estonia continued to be linked to the six-month Euribor.
Despite the recent rise in borrowing costs, competition between Estonian banks continues to put downward pressure on lending margins. SEB said that the average margin on its new housing loans was 1.37% plus Euribor in the second quarter of 2026, compared with 1.40% plus Euribor a year earlier. The bank also reported continued strong interest in housing loans, with the number of new applications in July reaching its highest level since May 2022.
The picture for other forms of household borrowing was somewhat different. According to data cited by SEB from Eesti Pank’s latest statistics, the interest rate on consumer loans was 0.53 percentage points lower than a year earlier, even as housing loan rates increased.
Housing lending has nevertheless remained strong. OECD data published this summer showed that Estonia’s housing loan portfolio had been growing by around 10% year on year in the six months to March 2026, considerably faster than the euro-area average of 2.8% over the same period.
The rise in Estonian mortgage rates comes against a broader change in financing conditions in Europe. Euro-area banks reported tighter credit standards and lending conditions for housing loans in the second quarter, while demand for housing loans declined markedly.
Eesti Pank’s quarterly interest-rate statistics cover new loans and leases issued by banks, creditors and savings and loan associations, as well as deposit rates. The central bank is scheduled to publish its third-quarter 2026 interest-rate statistics on 19 November.
Source: Eesti Pank
