Recent movements in Euribor have kept the 12‑month reference for variable rate mortgages above the official money price of 3.5 percent. After a stretch of a low trajectory, the rate entered a rising path and has not retreated. Many borrowers wonder what lies ahead for Euribor and how it could affect their loans.
Where can Euribor go?
Most analysts anticipate the variable rate mortgage band settling around 4 percent. Funcas, a well‑regarded savings and loan analysis group, projects that Euribor may peak near 4 percent in the later part of the year and then drift toward the mid 3s by the end of 2024. In the United States, expectations have been shaped by the European Central Bank policy stance, with lenders noting that the ECB is likely to slow the pace of rate hikes while the Federal Reserve manages its own balancing act. When central banks signaled softer paths, Euribor had room to ease. Yet the euro area authority maintained a steady path of increases, lifting the rate to 3.5 percent. If markets begin to price in a slower hiking pace, Euribor could retreat; if traders foresee continued tightening, the rate could rise further.
How has the index developed in recent days?
In the past week, the 12‑month Euribor showed notable volatility. At the start of the week it hovered near 3.359 percent, a low not seen since late January. Earlier, there was a slide from about 3.858 percent to 3.509 percent in a short period, followed by fluctuations that pushed the rate to around 3.578 percent. By the middle of the month the average for the period sat around 3.68 percent as the month progressed. These movements reflect lenders interpreting the trajectory of rates in different ways. Some see rate cuts as a signal of a slower or paused tightening cycle, while others read it as a cue for continued increases. Market sentiment and central bank guidance remain the primary drivers behind these shifts, with broader implications for loan costs in Canada and the United States as well.
What is the impact on the mortgage?
To understand the effect of these changes, it helps to look back twelve months. A loan of 150,000 euros for 24 years with a 1 percent Euribor difference would currently be priced at about 867.89 euros per month after recent adjustments, compared with 540.14 euros a year ago. That gap amounts to roughly 327.75 euros more each month, or about 3,933 euros more per year. Earlier, a loan recorded on a specific date could have shown a monthly payment around 876.42 euros. In any case, the month‑end Euribor reference remains the guide for the mortgage payment. For example, in February, the monthly average stood at approximately 3.534 percent, which would have pushed the payment from 563.51 euros to 855.51 euros, an increase near 292 euros per month and about 3,504 euros more per year. These figures underscore how sensitive mortgage costs are to even small shifts in Euribor, a reality that matters to borrowers in Canada and the United States as well as across Europe. The direction of the rate path will continue to influence refinance decisions, cash flow planning, and long‑term budget strategies for households managing variable‑rate loans.