Portugal’s mortgage market is seeing some movement this week, as the key reference rates driving home loan costs—the Euribor—have increased for three and six-month terms, but edged down at the 12-month mark.
Euribor Rates Up for Shorter Terms
As of Tuesday, the three-month Euribor rate rose to 2.066%. That’s an increase of 0.007 percentage points compared to the previous day. The six-month Euribor, currently the most commonly used reference for Portuguese mortgages, also nudged higher, reaching 2.121%—up by 0.001 points.
In contrast, the 12-month Euribor slipped slightly, declining to 2.206% (down 0.003 points versus Monday). These variations, though small, can have an impact on monthly mortgage repayments, especially for homeowners with variable-rate loans tied to these indices.
ECB Holds Policy Rates Steady
The European Central Bank (ECB) played a key role in this trend. On October 30, the ECB kept its official rates unchanged for the third consecutive monetary policy meeting. This pause—following a cycle of eight rate reductions since June 2024—was widely expected by analysts and lenders.
ECB President Christine Lagarde, speaking after the meeting in Florence, emphasized that while the bank is “in a good position” in terms of monetary policy, the future remains uncertain. The next ECB meeting is scheduled for December 17-18 in Frankfurt, and will be closely watched by both lenders and borrowers.
What is the Euribor and Why Does it Matter?
Euribor rates are based on the average interest rate at which 19 major Eurozone banks are willing to lend money to each other. They are a critical benchmark for the vast majority of Portuguese mortgages, especially those with variable interest rates, and are updated for new contracts and periodic rate reviews.
What Does This Mean for Portuguese Homeowners?
If you’re repaying a mortgage in Portugal, particularly with three or six-month rate reviews, you may see a slight increase in your next monthly payment. Those with 12-month reviews could see a modest decrease, depending on their contract date.
Financial advisers recommend homeowners keep a close eye on Euribor trends and factor in possible rate changes when budgeting, especially ahead of the ECB’s upcoming policy meeting.
For the latest on Portugal’s mortgage rates and financial trends, bookmark this page and stay informed about key changes that may affect your home loan.
