According to modeling by Deco/Dinheiro&Direit, housing payments paid to the bank will rise in October for all contracts indexed to Euribor rates, which are revised this month, increasing by €167.54 over the 12-month period.
A client with a loan of 150 thousand euros for 30 years, indexed to 12-month Euribor and with a “spread” (bank profit margin) of 1%, will pay 818.95 euros in installments in October, when until now I paid 651.41 Euro.
Considering a loan on the same terms (amount and maturity) but indexed to the six-month Euribor, the payment from October would be €807.98, reflecting an increase of €68.58 compared to the last revision in April.
For a three-month loan indexed to Euribor, the installment will be €794.27, which is €31.03 more than what has been paid since the last review in July.
These values were calculated taking into account Euribor averages in August: 4.030% for six months, 3.880% for three months and 4.149% for 12 months.
Euribor began to rise more significantly on February 4, 2022, after the European Central Bank (ECB) admitted it might raise key interest rates due to rising inflation in the eurozone, a trend that accelerated with the start of Russia’s invasion of Ukraine. February 24, 2022
At its last meeting on September 14, the European Central Bank (ECB) announced a further 25 basis point hike in its three key interest rates, the same as at the previous meeting, placing the deposit rate at its highest level ever in the region. Euro.
In a statement issued after the meeting of the Governing Council on monetary policy, the ECB said that interest rates applicable to main refinancing operations, as well as interest rates applicable to the margin lending facility and deposit facility, will be increased to 4.50%, 4 .75% and 4.00%. accordingly, comes into force on September 20, 2023.
“Inflation continues to fall, but is still expected to remain too high for too long. The Governing Council is determined to ensure that inflation returns to the medium-term target of 2% in a timely manner,” the central bank explained, stressing that “inflation continues to fall, but is expected to remain too high for too long. The increase in interest rates reflects the Governing Council’s assessment of the inflation outlook in light of available economic and financial data, underlying inflation dynamics and the strength of monetary policy transmission.”
It was the 10th straight rate hike by the central bank, which has raised interest rates by 450 basis points since July last year, the fastest growth cycle in euro zone history.
The next ECB monetary policy meeting will take place on October 26 in Athens.
Three-, six- and 12-month Euribor rates hit record lows respectively: -0.605% on December 14, 2021, -0.554% and -0.518% on December 20, 2021.
Euribor is set as the average rate at which a group of 19 eurozone banks are willing to lend to each other in the interbank market.
Author: Lusa
Source: CM Jornal
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