Euribor rises to new highs in three and six months

Euribor rates rose to three, six and 12 months this Monday compared to Friday and to new highs in the two shortest timeframes since November 2008.

The 12-month Euribor rate, currently the most commonly used in Portugal for floating-rate home loans, was raised to 4.150% this Monday, plus 0.016 points, after rising to 4.193% on July 7, a new maximum since November 2008 .

According to May 2023 data from the Bank of Portugal, the 12-month Euribor accounted for 40.3% of the ‘stock’ of floating-rate loans for permanent home ownership. The same data shows that the six- and three-month Euribor represented 34.4% and 22.8% respectively.

The average 12-month Euribor rate increased from 3.862% in May to 4.007% in June, plus 0.145 point.

Within six months, the Euribor rate, which entered positive territory on July 7, 2022, also rose this Monday, as it was set at 3.962%, 0.021 points higher than on Friday and a new high since November 2008.

The six-month Euribor average increased from 3.682% in May to 3.825% in June, an increase of 0.143 points.

Similarly, the three-month Euribor rose to 3.685% on Monday, plus 0.025 point and a new maximum since November 2008.

The three-month Euribor average increased from 3.372% in May to 3.536% in June, an increase of 0.164 percentage point.

The Euribor started to rise more sharply from 4 February 2022 after the European Central Bank (ECB) admitted that it could raise key interest rates due to the increase in inflation in the Eurozone and the trend was reinforced with the start of the Russian invasion of Ukraine on February 24, 2022.

At its most recent monetary policy meeting, held on June 15, the ECB raised rates again, for the eighth consecutive meeting, by 25 basis points – as on May 4 – an increase lower than the 50 basis points made on March 16. February 2 and December 15, when the pace of the climbs began to slow down.

Earlier, on October 27 and September 8, key interest rates rose by 75 basis points. On 21 July 2022, the ECB had raised the three main interest rates by 50 basis points for the first time in 11 years.

The three-, six- and 12-month Euribor rates reached an all-time low, respectively -0.605% on December 14, 2021, -0.554% and -0.518% on December 20, 2021.

The Euribor rates are set at the average rate at which a group of 57 banks in the eurozone are willing to lend each other money on the interbank market.