The reference interest rate is falling for the second time in a row – what owners can save now and how rates could develop by the end of the year.
The Euribor is providing cautious relief for property owners with variable-rate mortgages at the start of 2026. Following the noticeable rise at the end of 2025, the 12-month Euribor has now fallen for the second month in a row.
In February 2026, it closed at 2.221 percent. For many property owners in Mallorca and the Balearic Islands, this means falling monthly installments - at least for upcoming interest rate adjustments.
What does this mean in concrete terms for mortgage borrowers?
The economist Pau A. Monserrat, member of the CES, professor at the UIB and expert at Futur Legal, does the math:
For a variable-rate mortgage with a premium of Euribor + 1%, a term of 25 years and a remaining debt of 100,000 euros, the monthly installment falls by around 10 euros.
Calculated over one year, this equates to a reduction of around 120 euros.
Sounds manageable, but mortgage rates on the Balearic Islands are significantly higher than the national average.
Balearic Islands: Höhere credits, more noticeable effects
According to the latest INE data, the average mortgage in the Balearic Islands is 304,876 euros.
In this specific example, the monthly burden is reduced from 1,511 euros to 1,482 euros.
This corresponds to:
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29 euros less per month
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348 euros less per year
For comparison:
In Spain as a whole, the average mortgage amounts to 172,535 euros - around 76 percent less than in the Balearic Islands. Here, the monthly installment falls on average from 855 to 839 euros, i.e. by around 16 euros per month.
What's next in 2026?
The crucial question remains: Will the relief continue?
Forecasts show a rather stable picture.
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The FUNCAS panel expects a Euribor of 2.17% for December 2026.
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Bankinter forecasts a range between 2.25 % and 2.30 %.
Since February was already at 2.221%, the reference interest rate is currently exactly within the forecast corridor.
The trend: sideways movement with minimal losses.A slight decline is possible, as is a moderate countermovement – analysts do not currently expect any new upward momentum.
Attention: First slight increases possible from April
One detail is overlooked in many discussions:
While owners with an adjustment in March 2026 will still benefit from the reduction – in March 2025 the Euribor was at 2.385 % – there could be the first slight increases from April onwards.
In April last year, the reference interest rate had already fallen to 2.143%. Anyone who has their annual adjustment at exactly this time could therefore pay a few euros more again.
What does this mean for building and purchasing decisions?
For buyers with variable financing, the current development means one thing above all: predictability is returning.
After the sharp interest rate fluctuations of recent years, the Euribor is now moving within a narrower corridor. This creates costing certainty, especially for new build or renovation projects where financing costs are part of the overall bill.
The following should be noted:The major wave of relief has not materialized. However, the phase of sharp increases in charges appears to be over for the time being.For owners in Mallorca, this is no reason for euphoria - but a solid signal for stability in the financing environment in 2026.
