IRS Rates July 2026: How Much It Costs to Cancel Your Fixed-Rate Mortgage Now

Key data

Canceling a fixed-rate mortgage early has a cost that many holders don't know about until it's too late. The Bank of Spain Resolution of August 3, 2026 publishes the IRS rates (Interest Rate Swap) corresponding to July 2026, which are the legal reference for calculating the interest rate risk compensation that the bank can charge you if you cancel before maturity.

The logic is simple: if the current market rate is lower than the fixed rate you agreed to in your mortgage, the bank loses profitability with early cancellation and has the right to charge you that difference. These IRS rates are the official thermometer that measures that difference.

What does this regulation establish?

The Bank of Spain publishes monthly, under the Circular 5/2012, the IRS rates that serve as reference for two different calculations:

• Compensation for interest rate risk in fixed-rate mortgages: IRS rates are used according to the remaining term of the loan.
• Differential for early cancellations of loans or credits in general: the one-year IRS rate is used, set at 2.718% for July 2026.

Below is the complete table of IRS rates published for July 2026:

The maximum rate in the entire table stands at 3.315% at twenty years. From there, the rate at thirty years drops slightly to 3.248%, which reflects the typical shape of the long-term interest rate curve.

Economic and operational impact

The direct impact of these rates occurs when a fixed-rate mortgage holder requests early cancellation. If the fixed rate agreed in your mortgage is higher than the IRS rate of the remaining term published, the bank can claim compensation equivalent to that difference applied to the outstanding capital.

The greater the difference between your contracted fixed rate and the reference IRS rate, the greater the potential compensation. With current IRS rates ranging between 2.718% and 3.315%, those who contracted fixed-rate mortgages in 2019-2022 —when long-term fixed rates ranged between 1% and 2.5%— have a different situation than those who signed in 2023-2024 with rates of 3.5% to 4.5%.

• Fixed-rate mortgages contracted at low rates (below current IRS): the bank cannot charge compensation, since the market rate is higher than the agreed rate.
• Fixed-rate mortgages contracted at high rates (above current IRS): the bank can claim compensation, calculated on the outstanding capital and remaining term.

Who does it affect?

• Individuals with fixed-rate mortgages who are considering canceling early (due to property sale, inheritance, change of entity, or improved conditions).
• Companies and developers with fixed-rate mortgage loans on real estate assets.
• Financial and mortgage advisors who advise clients on the real cost of cancellation.
• Financial institutions that must apply these indices in their compensation calculations.
• Holders of loans or credits in general that are canceled early (for the differential, the 1-year IRS is used: 2.718%).

Practical example

Imagine that in 2023 you signed a fixed-rate mortgage at 3.80% for 25 years, and today you have 22 years left on the loan with outstanding capital of €180,000. You want to cancel it because you've sold the apartment.

The reference IRS rate for the closest available term (20 years) is 3.315%. Since your fixed rate (3.80%) is higher than the market IRS (3.315%), the bank has the right to charge you interest rate risk compensation. The difference is 0.485 percentage points applied to the outstanding capital and remaining term.

In this scenario, compensation could amount to several thousand euros. Knowing the published IRS rate before requesting cancellation allows you to negotiate with real data and, if applicable, assess whether it's better to wait for market rates to rise or seek a subrogation instead of canceling.

Conversely, if your fixed-rate mortgage was signed in 2020 at 1.5%, the current IRS rate (3.315% at 20 years) is much higher than yours, so the bank cannot charge you compensation: canceling now would be free in this regard.

What should mortgage holders do now?

1. Locate the fixed rate of your mortgage in the deed or latest bank statement. This is the key data for comparison.
2. Identify the remaining term of your loan (years you have left). This term determines which IRS rate from the table applies to your case.
3. Compare your fixed rate with the published IRS for July 2026 according to your remaining term. If your rate is lower than the IRS, there will be no compensation. If it's higher, there will be a cost.
4. Request a detailed calculation from the bank of the compensation before signing any cancellation document. They are obligated to provide it.
5. Consider alternatives: subrogation to another entity, modification of conditions, or waiting for a rate change that reduces compensation.
6. Consult a financial or mortgage advisor if the compensation amount is significant, to verify that the bank's calculation is correct according to Circular 5/2012.

Official source

Consult complete regulation in official source

Notice: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-17569