Housing payments will increase in November at all times

According to modeling by Deco/Dinheiro&Direitos, housing payments paid to the bank will rise in November for all contracts indexed to Euribor rates, which will be renegotiated this month, increasing by €135.55 over the 12-month period.

A customer with a loan of 150 thousand euros for 30 years, indexed to the 12-month Euribor and with a “spread” (the bank’s rate of return) of 1%, will pay 819.96 euros from November, an increase of 135.55 euros compared to what you paid last year.

In the case of a loan under the same conditions (amount and repayment period), but indexed to the six-month Euribor rate, the client pays 815.81 euros, which is 54.36 euros more than he paid since May.

For loans indexed to the three-month Euribor, the housing contribution – for the above-mentioned conditions – increases in November to €802.30, reflecting an increase of €26.87 per month compared to the last review in August.

In the case of loans indexed to the 12-month Euribor, the increase in contributions is larger than in the other two indices, since for those with a loan indexed to this term, the review only occurs every year. The increase that will occur for contracts that are renewed in November is even in this case less than for contracts whose execution was renegotiated in October, where the increase was 167.54 euros in this index period.

These values ​​were calculated taking into account Euribor averages in October, which were 4.115% for six months, 3.968% for three months and 4.160% for 12 months.

The evolution of Euribor interest rates is closely linked to increases or decreases in European Central Bank (ECB) interest rates.

After several years in negative territory, the Euribor began to rise more significantly on February 4, after the ECB admitted it may raise key interest rates due to rising inflation in the eurozone.

Since July 2022, the ECB has raised interest rates 10 times in a row, breaking the hike cycle for the first time at its meeting on October 26, leaving rates unchanged.

Thus, the deposit rate remains at 4%, the highest level recorded since the introduction of the single currency in 1999, while the main refinancing interest rate remains at 4.5% and the rate applicable to credit constant liquidity line remains at 4.75%.

At a press conference following the meeting, ECB President Christine Lagarde warned that inflation risks, aggravated by the conflict in the Middle East, do not yet allow us to consider the possibility of lowering interest rates.

“It is completely premature to discuss cuts at this stage,” Lagarde said.

A statement released by the institution said that based on its assessment, “the Governing Council believes that key interest rates are at levels that, if maintained for a sufficiently long period, will make a significant contribution” to ensuring that inflation falls. return to the target of 2%.