Fiduciam has opted to keep its euro lending rates unchanged despite the European Central Bank increasing its key interest rates by 25 basis points.
The institutionally backed bridging and development lender says it will continue offering the same fixed euro rates established at the start of 2026, providing borrowers with certainty at a time of ongoing market volatility and inflation concerns.
The ECB’s latest move lifts the deposit facility rate to 2.25%, with market expectations pointing towards a further increase to 2.50% later this year.
However, Fiduciam says both existing and new borrowers would be insulated from the latest rise due to its fixed-rate lending model.
GEOPOLITICAL TENSIONS
The decision comes as developers and property investors continue to navigate inflationary pressures, rising construction costs and wider economic uncertainty, much of which has been exacerbated by geopolitical tensions in the Middle East.
Fiduciam says recent inflationary pressures across the Eurozone have been driven in part by higher energy prices and market uncertainty linked to the conflict.
However, following the recent Memorandum of Understanding between the United States and Iran, the lender believes these pressures are likely to prove temporary.
MANAGING RISK
Johan Groothaert (main picture), chief executive of Fiduciam, says: “Fiduciam has always lent on a fixed-rate basis, which eliminates financing cost risk for entrepreneurs and developers. Existing borrowers therefore know exactly what their financing costs are, regardless of changes in central bank rates.
“We believe financial institutions are better placed to manage interest rate risk than SME borrowers.
“Absorbing that risk, rather than passing it on to borrowers, also has the added benefit of supporting the credit quality of our loan book.
“For new euro loans, we will continue to offer the same fixed interest rates as those established at the outset of this year.
“Our decision to maintain rates for new loans reflects Fiduciam’s strong financial position, our confidence in the resilience of the market, and our continued commitment to providing borrowers with certainty.”
