EURIBOR & Mortgages
EURIBOR and Mortgages: How Rate Changes Affect Payments
EURIBOR (Euro Interbank Offered Rate) is the benchmark interest rate that determines the cost of most variable-rate mortgages in the Eurozone.
EURIBOR (Euro Interbank Offered Rate) is the benchmark interest rate that determines the cost of most variable-rate mortgages in the Eurozone.
What This Page Covers
EURIBOR is the average interest rate at which European banks lend to each other. Most variable-rate mortgages in Spain, Italy, Portugal, and other Eurozone countries are priced as EURIBOR + a fixed spread (e.g., EURIBOR + 1.5%).
How It Applies
A €150,000 mortgage in Spain at EURIBOR (3.0%) + spread (1.0%) = 4.0% total rate. If EURIBOR rises to 4.0%, the rate becomes 5.0%. Monthly payment changes from €716 to €805 — an increase of €89/month.
Details
EURIBOR is reviewed every 6 or 12 months in most mortgages (revisión de cuota). When EURIBOR is low, variable mortgages are cheaper than fixed. When EURIBOR rises, monthly payments increase.
Context
Most Spanish mortgages are EURIBOR + spread, reviewed annually. Italian mortgages also commonly use EURIBOR. German mortgages are predominantly fixed-rate. Portuguese mortgages are typically 70% variable, 30% fixed. The ECB sets policy rates that influence EURIBOR.