The European Central Bank (ECB) has confirmed that interest rates will remain unchanged, keeping the deposit rate at 2%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%. For anyone considering buying property in Italy, this provides a stable borrowing environment for 2026. But how will fixed and variable mortgage rates evolve, and what does it mean for buyers? Fabio Femiani of idealista/mutui shares the outlook.
Why the ECB held rates
"The Governing Council has decided to maintain the three key ECB rates unchanged," said the ECB. Inflation is expected to stabilise around 2% in the medium term, with projections for 2026 indicating overall inflation at 1.9% and core inflation (excluding energy and food) at 2.2%. Italy’s economy is showing steady, moderate growth, around 1.2% in 2026, providing a solid foundation for property buyers.
Impact on banks and borrowers in Italy
Fabio Femiani of idealista/mutui explains:
"Banks are making small upward adjustments to lending terms, but monthly repayments remain manageable. Demand for mortgages is still strong, and lenders continue to offer new credit. Borrowers with variable or mixed-rate mortgages coming to the end of their fixed period may now explore more predictable options."
Foreign buyers should also note that this stable environment makes planning long-term property investments in Italy easier, as borrowing costs are less likely to spike suddenly.
Mortgages in Italy in 2026
"Italy’s economy is showing resilience," says Femiani. "Inflation is easing, households are gradually regaining purchasing power, and the banking system is stable. GDP growth is expected around 1% in 2026. The housing market, which stabilised in 2025, is now ready to benefit from lower borrowing costs."
Fixed vs Variable Rates in Italy:
- Variable rates (Euribor) are expected to normalise between 2.50% and 2.90%, making them attractive early in the repayment schedule.
- Fixed rates (IRS) will improve but remain between 3.00% and 3.40%, influenced by Italy’s public debt and investor caution. Buyers will need to carefully weigh the advantages of each option.
Demand and property prices
"2026 will be a year of informed choices for property buyers in Italy," adds Femiani. "Mortgage volumes are expected to rise, signalling confidence. Property prices will continue to grow selectively by 2–3% nationally. Energy-efficient homes (aligned with Italy’s Green Building Directive) will see the strongest growth, while older properties offer opportunities for renovation and investment. For idealista/mutui, 2026 is not just a year of recovery, but the start of a more mature, accessible, and sustainable Italian property market."
ECB meeting dates in 2026
Foreign buyers and investors can keep an eye on these ECB dates, when monetary policy updates could influence borrowing costs:
- 5 February
- 19 March
- 30 April
- 11 June
- 23 July
- 10 September
- 29 October
- 17 December