Fixed or floating rate: what to choose in 2026

How the floating rate is set

A floating rate is the sum of two parts: a reference index, which changes, and a margin, which is fixed in the contract for the whole term. When the index rises, so does the payment.

The Act on Real Estate Credit for Consumers gives you five things you can ask for:

• The methodology for calculating the index is part of the contract and the bank cannot change it unilaterally (Art. 25(3)).
• The methodology and the current level of the index are public on the bank’s website (Art. 25(4)). Check them before you sign, not afterwards.
• The bank must provide you with the index values for 20 years back (Art. 25(5)). That is the most direct way to see how much it moved in bad years.
• For every change in the rate you receive a notice with the new payment before the change takes effect (Art. 28). When the contract terms change, you also get a new repayment schedule, the deadline for objecting and the authority you can complain to (Art. 28a, in force from 20 June 2025).
• Before you sign, you receive an additional APR example for a significant rate rise and, where the contract has no upper limit, an explicit warning about that too (Art. 29(7)).

EURIBOR and the banks’ indices

EURIBOR is the rate at which large banks in the eurozone lend to each other. It follows ECB rates almost immediately. As at 15 October 2026 the 3-month EURIBOR is 2.636% and the 6-month EURIBOR 2.954% (data from euribor-rates.eu, published with a 1-day delay).

Most Bulgarian banks, however, do not use EURIBOR. After the introduction of the euro they moved to their own indices in euro. In October 2026 these indices are between 0.40% and 1.19%. At some banks the index is calculated from the interest rates on households’ time deposits. Deposit rates change more slowly, so these indices also react more slowly to the ECB.

What the banks offer with a fixed rate

A fixed rate stays the same for a set period, usually 3, 5 or 10 years. After that the loan moves to a floating rate: an index plus a margin under the terms of the contract. Check these before you sign, because they determine your payment after the fixed period ends.

Five banks publish fixed rates: UBB for 3, 5 or 10 years, UniCredit Bulbank for 5, DSK Bank and ProCredit Bank for 3, and Postbank for 10 years. Their rates, promotions and the APRs from the examples are in the table of fixed rates. The average market rate for a fixing of over 1 and up to 5 years is 2.99%, but it is calculated on a small base: €2.1 million of €643.6 million of new home loans in September 2026.

The numbers: €127,500 over 30 years

Example for an apartment worth €150,000 with 85% financing. The floating rate is 2.43%, an example value close to the average for new housing loans (BNB: 2.41% in September 2026). The fixed rate is 3.09% for 5 years, as at UBB.

If the floating rate does not change, fixing costs €44.60 a month more, or about €2,676 over 5 years. It pays off if the floating rate averages more than about 3.09% over those 5 years, that is, about 0.7 percentage points above today’s. If rates rose by 2 points, the payment on the floating rate would increase by €137 a month.

Work out your amount in the mortgage calculator.

When each rate suits you better

There is no reliable forecast for interest rates. The ECB raised them twice in 2026, from 17 June and from 16 September, and its deposit facility rate is now 2.50%. The average rate on new home loans in Bulgaria, however, has stayed between 2.41% and 2.52% since the start of 2025.

If you already pay a loan with a floating rate

You can turn it into a fixed-rate one by renegotiating with the same bank or by refinancing with another. After the 12th instalment early repayment carries no fee, while the renegotiation fee depends on the bank: at DSK Bank it is 1% of the balance, but no more than €255.

Loans in leva after the euro

Loans in leva became loans in euros on 1 January 2026 at the rate of 1.95583, without an annex. The Act on the Introduction of the Euro prohibits the new floating rate on that date from being higher than the old one. A fixed rate stays the same.

• The BNB discontinued the base interest rate (BIR) and LEONIA Plus from 1 January 2026. Banks replaced these indices with EURIBOR or with their own euro indices.
• If the bank changes the index under its action plan, the new rate cannot be higher than the previous one, and you have the right to repay the loan early without compensation (Art. 25 of the Act on Real Estate Credit for Consumers; what this means in practice).
• Until 31 December 2026 you can ask, free of charge, for the lev values of your debts on the conversion date. The bank replies within 7 days. How exactly loans were converted is described in the article the euro and loans in Bulgaria (in Bulgarian).