12 months Euribor hits 3%

 In Cost of Living Crisis, Mortgage lending, News

The Euribor interest rate for 12 months ultimately fixed on mortgages lent by banks has hit the 3% mark for the first time in 14 years.

The last time the rate was pegged so high was on 1 January, 2009 in the depths of the EU’s sovereign debt crisis.
Now, 14 years on, it has hit the same heights, set at 3.057% on Monday in what can only be bad news for mortgage holders who will see the monthly interest on home loans rise.
Euribor has gone up right before Christmas because the European Central Bank increased base interest rates with its President Christine Lagarde saying that the institution would continue to pursue an aggressive interest rates policy to control inflation.
2022 has been characterised as a year marked by an increase in the Euribor rate and next year will be more of the same, leaving thousands of families already feeling the pinch with their gas and electricity bills and at supermarket checkouts ever more keenly.
In relation to Euribor at 12 months, which a large proportion of the Portuguese have pegged their mortgages at (70% of new mortgages in 2020 and 2021), interest on mortgage repayments stood at -0.505% and by the new year will be at 3%, increasing the base point by 350 within the space of 12 months.
This increase means an increase of €250 in the monthly repayments on a €150,000 30-year mortgage at a time when families are facing a rising cost of living because of inflation running at 8% this year.