ECB's Impact on Savings and Mortgage Rates

The European Central Bank's (ECB) decisions on interest rates significantly influence savings and mortgage rates across Europe. The ECB aims to maintain price stability, targeting a 2% inflation rate. Central to this is setting key interest rates, including the deposit rate, currently at 2.75%, which affects savings accounts. Despite recent attractive savings rates of up to 3.5%, many offers cater to new customers and are short-lived, with average rates declining to about 1.58%.

Mortgage rates, particularly for long-term financing, are predicted to remain stable, with current rates around 3.42% for a 10-year fixed loan. Analysts suggest that while a further reduction in the ECB's rates is anticipated, its impact on mortgage rates may be limited due to other influencing factors like government bond yields and economic conditions. The ECB's future moves remain uncertain, influenced by external factors such as global trade policies and economic changes, with experts predicting a cautious approach moving forward.