Consumer Loans in the Euro Area Remain More Than Twice as Expensive as Mortgages — and the Baltics Stand Out
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A new review by Konsumentguiden.se of fresh European Central Bank (ECB) statistics, underline a growing divide between everyday borrowing and housing finance across the euro area. In December 2025, the interest rate on new consumer loans in the euro area averaged 7.15%, while mortgage borrowing costs—measured using a weighted “composite cost-of-borrowing indicator”—stood at 3.32%.
That’s a gap of 3.83 percentage points. Put differently, consumer credit is about 2.15 times more expensive than mortgages—roughly 115% higher in relative terms.
“The difference between housing finance and everyday credit works as a clear consumer barometer. Mortgage rates often get the most attention—but consumer credit hits monthly expenses directly, especially when several smaller loans are stacked on top of each other,” says Stefan Sällberg, financial columnist at Konsumentguiden.se.
Quick snapshot: euro area borrowing costs (December 2025)
Consumer loans (new business): 7.15% (down from 7.33% in November)
Mortgages (weighted indicator): 3.32% (roughly unchanged)
Gap: 3.83 percentage points
Consumer vs mortgage ratio: 2.15×
Relative difference: +115% vs mortgages
Even after a month-on-month decline in consumer credit rates, everyday borrowing remains far more expensive than housing finance in the euro area average.
Where consumer borrowing is most expensive: the Baltic spike
The headline country story is hard to miss: the Baltic states sit at the top of the table, with double-digit consumer loan rates alongside mortgage rates below 4%. In other words: high-cost everyday credit, even as mortgage pricing is comparatively moderate.
Biggest consumer-vs-mortgage gaps (December 2025)
Estonia: 13.28% vs 3.78% → 3.51×
Latvia: 13.35% vs 3.81% → 3.50×
Portugal: 8.63% vs 2.84% → 3.04×
Greece: 9.94% vs 3.43% → 2.90×
Slovakia: 8.98% vs 3.41% → 2.63×
The pattern suggests a broader theme: the price of unsecured borrowing varies dramatically across the euro area, and can diverge sharply from mortgage pricing in the same country. See the full list at Konsumentguiden.se.
At the other end: where the gap is smallest
Some countries show a far narrower spread—meaning consumer loans are closer to mortgage costs, at least compared to the euro-area average.
Smallest consumer-vs-mortgage gaps (December 2025)
Luxembourg: 3.94% vs 3.47% → 1.14×
Croatia: 4.95% vs 3.04% → 1.63×
Belgium: 5.92% vs 3.45% → 1.72×
Cyprus: 6.21% vs 3.27% → 1.90×
Finland: 5.38% vs 2.82% → 1.91×
The spread across countries is striking: from 1.14× in Luxembourg to 3.51× in Estonia—an enormous range for borrowers who may assume “euro area rates” move broadly in sync.
The Nordics: below average levels, but the same story
Konsumentguiden’s review also highlights a Nordic angle: Sweden (used as a comparison country outside the euro area) and Finland both sit below the euro-area averages for consumer loan rates and mortgage rates in December 2025.
But the basic consumer-finance story still holds: even in the Nordics, consumer loans remain around twice as expensive as mortgages—just from a lower level and with a smaller gap than the euro-area average.
Why such big differences between countries?
ECB’s MFI interest rate statistics point to several broad drivers behind cross-country variation in borrowing costs, including:
Competitive conditions (how contested lending markets are)
Risk premiums (how lenders price credit risk)
Administrative and operating costs
Institutional and structural factors
Consumer loans are also typically unsecured, which makes them more risk-sensitive than mortgages and can widen the spread—especially where lenders price risk more aggressively.
Why this matters: consumer credit can hit budgets faster than mortgages
Mortgage rates dominate headlines. But consumer credit—often used for cars, household spending, or consolidating smaller debts—can affect monthly budgets quickly because the rates are higher and terms are often shorter.
The “credit gap” between consumer and housing borrowing costs therefore works as a simple, practical indicator of household pressure: when everyday credit remains expensive, financial breathing room shrinks, especially for households that rely on multiple small loans.
About the data
The analysis is based on the ECB’s MFI Interest Rate Statistics (MIR) and refers to new business (new loans). Mortgages are presented using a weighted “composite cost-of-borrowing indicator” to reduce volatility, while consumer loans refer to new loans for consumption (AAR).
