The euribor measured the smallest rise in more than a year during October, hovering near 4.16%. While payments on variable-rate mortgages are still set to climb, the pace is softer than in prior months. As a result, euribor has become the principal reference for many home-purchase loans tied to this rate. In recent months there have been two back-to-back increases. After a first dip in twenty months in August, the average stood at about 4.149% in September, and the index remains on a path to slip below 4% in the near term.
The one-year euribor has drifted away from the 4.2% mark as banks interpret this trend, and the likelihood of further rate hikes dwindles. At the European Central Bank’s most recent Governing Council meeting, the 4.50% increase that began last July was halted. Analysts anticipate the one-year daily euribor to stay roughly between 4% and 4.1% for several months, even as policymakers remind markets that money prices will stay elevated for a considerable period.
Mortgage adjustments tied to variable rates typically occur every six months, though many lenders complete reviews on an annual basis. Installments rise whenever the reference euribor for the review month is higher than the same month a year earlier. The softer tone of upward adjustments is expected to persist as new euribor levels remain high relative to the latter half of 2022. This supports a gradual normalization rather than sharp jumps in the near term.
In October of the previous year, the index stood at 2.629, producing a gap of 1.541 points and signaling a decline in monthly increases. The spread narrowed from a peak of 3.884 points in March to present levels, underscoring how mortgage costs have moved in response to evolving money-market conditions. A mortgage calculator can help households estimate the impact of these movements on their own loans.
Consider a €150,000 loan over 24 years indexed to euribor plus 1%, using October figures as a reference (with December typically used for reviews). The monthly payment would rise from €780.90 to €909.24, an increase of €128.34 per month and €1,540.08 per year. For a €300,000 loan with the same terms, the monthly payment would grow from €1,561.80 to €1,818.48, an extra €256.68 each month or €3,080.16 yearly.
Decreases since May
The pace of gains has moderated compared with earlier months. Two reference loans, used to illustrate shifts over the past two years, were revised to €553 and €1,106 per month based on August 2021 data. Projections suggest that within two years these payments could increase by between €355 and €710 per month, illustrating a net rise of roughly 64% in the overall burden.
During a recent presentation of third-quarter results, CaixaBank’s Chief Executive Officer noted the forecast that mortgage payments would begin to ease in line with May data and that euribor is expected to hover around 3.2%–3.3% over the next three to four years. The assessment points toward a gradual softening of costs for households with variable-rate mortgages while keeping the monetary environment tight enough to support inflation targets.