On 10 September 2026, at a Governing Council meeting held in Berlin, the European Central Bank raised its three key interest rates by 0.25 percentage points. This is the second increase this year, following June's, and only the second after a long easing cycle.
This article updates our earlier piece, The ECB raised rates, Bulgarian mortgages got cheaper, which covered the first hike of 11 June. Two things have changed since: the decision of 10 September, and the BNB's interest rate statistics for July, published on 27 August.
| Rate | Until now (from 17 June 2026) | From 16 September 2026 |
|---|---|---|
| Deposit facility | 2.25% | 2.50% |
| Main refinancing operations | 2.40% | 2.65% |
| Marginal lending facility | 2.65% | 2.90% |
The 23 July meeting left rates unchanged. So across nine months the deposit facility has moved from 2.00% to 2.50% — half a point higher.
The reason the ECB gives is energy, not demand. The conflict in the Middle East continues to generate price pressure, and inflation is expected to remain well above target for an extended period.
The figures behind the decision:
The ECB's new staff projections see headline inflation averaging 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, with growth of 0.9%, 1.4% and 1.5% respectively — an upward revision to growth for both 2026 and 2027.
The part that matters most to a borrower comes at the end of the statement: the ECB is working meeting by meeting and is not pre-committing to any particular rate path. The next two monetary policy meetings are on 29 October and 17 December 2026.
Here the picture looks different. From the BNB's interest rate statistics for July 2026, published on 27 August:
In short: the price of a Bulgarian mortgage has barely moved, but the volume is cooling noticeably. A 13.4% monthly fall is the most visible change in this release, and it fits the portfolio slowdown we described in our article on the BNB's July figures.
In the same statement, the ECB reports that average euro area mortgage rates were unchanged in June and July at 3.5%, with mortgage lending growth easing to 3.0% in July.
The comparison is instructive:
| Indicator (July 2026) | Euro area | Bulgaria |
|---|---|---|
| Average mortgage rate | 3.5% | 2.43% |
A gap of more than a full point is neither an error nor a passing anomaly. It follows from the structure of Bulgarian banking: banks here fund themselves largely from domestic deposits rather than the interbank market, and set their base rate by their own methodology, tied mainly to the cost of those deposits. An ECB move therefore does not pass through automatically — the mechanism is set out in detail in our earlier article on the subject.
That does not mean never. It means later, and by less.
To give the change a scale, here is what it does to a monthly instalment. The calculation is illustrative, on an annuity basis, for a loan of €200,000 over 25 years, and is not an offer:
| Rate | Monthly instalment | Difference |
|---|---|---|
| 2.43% | ≈ €890 | — |
| 2.68% (+0.25 points) | ≈ €915 | +€25 |
| 2.93% (+0.50 points) | ≈ €941 | +€51 |
Proportionally, on a €100,000 loan the same +0.25 points works out at roughly €13 a month.
The amounts are moderate. But on a floating-rate loan they accumulate over the whole term, and ECB decisions rarely arrive alone — they arrive in cycles.
Three things, in this order:
1. Whether your rate is fixed or floating — and until when. Many Bulgarian contracts carry a fixed period of one to five years and then switch to floating. If yours expires in the next 12 to 18 months, now is the time to work out the instalment at a higher rate — not when the letter arrives.
2. How the floating component is actually built. Read the definition of the base rate in your contract: what it is tied to, who sets it, and how a change is announced. The wording differs materially between banks.
3. The terms for early repayment and refinancing. July's renegotiated and refinanced housing loans came to €140.8 million, which makes this ordinary practice rather than an exception. The terms, however, are individual and are worth reading in advance.
For a rough sense of the instalment at different rates, use our mortgage calculator. The full context on applying is in our guide Mortgage loans in Bulgaria.
On every bank-financed transaction we calculate the instalment not only at the quoted rate but also under a higher-rate scenario. That is a standard part of the conversation before a reservation, not an add-on. We also check how the floating component is defined in the specific offer, because two offers with the same headline rate usually diverge precisely there. Where a buyer's fixed period is due to expire soon, we raise refinancing before the purchase, not after it.
The ECB has raised rates for the second time this year, to 2.50% on the deposit facility, effective 16 September 2026. The driver is energy inflation, not overheating demand. In Bulgaria the effect so far is minimal on price (an average 2.43% in July, up 0.02 points) and far more visible on volume (new business down 13.4% in a month). The gap with the euro area remains above a full point. The ECB's next meetings are on 29 October and 17 December.
If you hold a floating-rate mortgage, or are about to take one, and want to see what this means for your instalment specifically — call us or come into the office. We will look at the contract and run the scenarios with you.
ECB data (10 September 2026) and BNB data (interest rate statistics for July 2026, published 27 August 2026), verified as at September 2026. Interest rates are indicative and subject to change. The illustrative instalments are not an offer.
