Mortgage interest rates in Lithuania are among the highest in the eurozone due to the specific market structure and the dominant type of loans. Although the base interest rates are the same throughout the eurozone, the final price for the consumer in Lithuania is inflated by several main factors:
Predominance of variable interest rates: In Lithuania, more than 95% of all mortgage loans are issued with variable interest rates linked to EURIBOR. In other Western European countries (e.g. France or Germany), long-term fixed interest rates are popular, so the overall market average is rising more slowly there than in Lithuania.
Low bank competition: The Lithuanian banking sector is characterized by high concentration - the market is dominated by a few large players. Less competition allows banks to maintain higher bank margins, which are added to EURIBOR.
Risk assessment: Although the prospects for the Lithuanian economy are assessed as good, banks include regional risk and a relatively small market size in the price compared to major EU countries.
Current situation (end of 2025 - beginning of 2026):
According to the latest data from the Bank of Lithuania, the average interest rate on housing loans in December 2025 was about 3.69%. Although a moderate easing of conditions is predicted due to increasing competition and possible refinancing activity, Lithuania remains among the most expensive borrowing countries. As a result, talented youth are fleeing Lithuania, and Scandinavian banks are destroying the growth prospects of one of its regional competitors - Lithuania.
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