Portuguese homebuyers and homeowners with variable-rate mortgages are keeping a close eye on fluctuations in Euribor rates, as the cost of borrowing sees subtle shifts this autumn. The latest data reveals incremental increases in both the three- and six-month Euribor rates—key benchmarks for home loan interest rates in Portugal.
Six-Month Euribor Gains Popularity Among Borrowers
According to recent figures from the Bank of Portugal (BdP), the six-month Euribor has become the most common index for variable-rate home loans in the country. As of August, nearly 38.13% of all outstanding variable-rate loans for permanent housing are now tied to the six-month Euribor, surpassing the 12-month (31.95%) and three-month (25.45%) options. This shift marks a significant change in borrower preferences since January 2024, as many seek a balance between rate stability and cost.
Portugal Home Loan Rates See Modest Upticks
The six-month Euribor rate edged higher on Friday, setting at 2.113%—a 0.003-point increase from the previous day. Likewise, the three-month Euribor moved up to 2.010%, whereas the 12-month Euribor slipped slightly to 2.164%.
Looking at September averages, all three Euribor maturities experienced renewed upward momentum:
- 3 Months: Monthly average rose by 0.006 points to 2.027%
- 6 Months: Monthly average up by 0.018 points to 2.102%
- 12 Months: Largest jump, increasing by 0.058 points to 2.172%
These modest increases mean borrowers with variable interest rates may soon see a slight uptick in their mortgage repayments, depending on how lenders adjust to the new benchmarks.
European Central Bank Holds Steady…For Now
Despite these rate nuances, the broader interest rate environment remains cautious. On September 11, the European Central Bank (ECB) chose to keep its key policy rates unchanged for the second straight meeting, pausing after a streak of eight consecutive cuts that began in June 2024. The ECB’s next policy meeting is set for October 29-30 in Florence, Italy, and is being watched closely for fresh signals on rate direction.
What’s Next for Home Loan Interest Rates in Portugal?
The Euribor rates are set daily by averaging the rates at which 19 major eurozone banks lend to each other. Fluctuations often reflect broader economic trends, ECB policy decisions, and financial market sentiment. With the six-month Euribor now the preferred benchmark among Portuguese borrowers, any further changes could have a greater immediate impact on household budgets, especially as rate reviews and loan renewals approach.
For those considering a mortgage in Portugal or already holding a variable-rate loan, staying informed about these subtle yet consistent Euribor movements is more important than ever.
