The Middle East peace plan is leading to a decline in Euribor rates, potentially reducing house payments for those with reviews scheduled for November.
“After the announcement of the peace plan in the Middle East, we witnessed a trend reversal. We were experiencing stabilization, even slight increases, but since Thursday, there’s been a decline in rates. A drop in oil prices might pressure prices and inflation overall. This could provide a good reason for the ECB to continue its monetary policy or possibly lower it,” explained Nuno Rico from DECO Proteste to SIC Notícias.
The economist further noted that the “tendency for the coming times is for stabilization until the end of the year and possibly a slight increase in 2026.”
However, “economic stagnation in France, Germany, and other European economies could incentivize the ECB to lower interest rates at the next meeting.”
“There are contradictory signals that could influence the evolution of Euribor,” concluded Nuno Rico.
The agreement between Israel and Hamas was announced on October 8 as the first phase of the peace plan proposed by U.S. President Donald Trump, with indirect mediation from Egypt, Qatar, and Turkey.
With 67,000 dead and 170,000 wounded in two years of war, the UN estimates that over 90% of the homes in Gaza have been damaged or destroyed.
What about those with adjustments in October?
The house payment for a bank loan will decline by 64.19 euros in October for contracts with variable rates, with a loan of 150,000 euros linked to the 12-month Euribor, according to a simulation by Deco.
The October payment, considering an average 12-month Euribor rate of 2.102%, will be 646.41 euros, compared to 710.60 euros in the previous period, reflecting a 64.19 euro decrease.
Simulations for Lusa by DECO Proteste/Contas e Direitos are based on a scenario with 150,000 euros financed over 30 years and a commercial profit margin (‘spread’) of 1%.
A customer with a similar credit, but based on the six-month Euribor, will see their payment decrease by 23.28 euros to 640.69 euros, considering the last review in April.
For credit indexed to the three-month Euribor, the payment will now be 634.59 euros, compared to 631.11 euros from the last July review, a 3.48 euro increase.
On September 11, the European Central Bank (ECB) maintained key interest rates, including the deposit rate at 2.00%, regarded as neutral for the eurozone as it neither stimulates nor hinders economic growth.
The ECB’s Governing Council decided to keep the standing deposit facility rate at 2.00%, the main refinancing operations rate at 2.15%, and the standing lending facility rate at 2.40%.
