Euribor falls to 3 months and rises to new highs for 6 and 12 months

The 12-month prime rate in Portugal rose today to 3.486%, a new high since December 2008.

Euribor rates fell today for three months and rose for six and 12 months to new highs since December 2008, of 3.103% and 3.486%, respectively.

The 12-month Euribor rate, which is currently the most widely used in Portugal for variable rate mortgages, rose today to 3.486%, up 0.035 points and a new high since December 2008.

According to the Bank of Portugal, the 12-month Euribor already represents 43% of the ‘stock’ of loans for permanent owner-occupied housing with a variable rate, while the six-month Euribor represents 32%.

After shooting up on April 12 to 0.005% for the first time positive since February 5, 2016, the 12-month Euribor has been in positive territory since April 21.

The average 12-month Euribor advanced from 3.018% in December to 3.338% in January, up 0.320 points.

In the six-month term, the Euribor rate, which entered positive territory on June 6, advanced today to 3.103%, up 0.049 points from Wednesday and also a new high since December 2008.

The average six-month Euribor rose from 2.560% in December to 2.864% in January, up 0.304 points.

The six-month Euribor was negative for six years and seven months (between November 6, 2015 and June 3, 2022).

In the opposite direction, the three-month Euribor, which entered positive territory on July 14 for the first time since April 2015, dropped today, when it was set at 2.607%, down 0.001 points, after having risen to 2.608% on Wednesday, a new high since January 2009.

The three-month Euribor rate was negative between April 21, 2015 and last July 13 (seven years and two months).

The average three-month Euribor rose from 2.063% in December to 2.354% in January, an increase of 0.291 points.

Euribor rates have started to rise more significantly since February 04, 2022, after the European Central Bank (ECB) admitted that it might raise key interest rates this year due to rising inflation in the Eurozone and the trend was reinforced with the start of Russia’s invasion of Ukraine on February 24, 2022.

At the last monetary policy meeting, on February 2, the ECB raised its key interest rates again by 50 basis points, the same as on December 15, when it started to slow down the pace of increases compared to the two previous ones, which were 75 basis points, on October 27 and September 8, respectively.

On July 21, the ECB had raised the three key interest rates for the first time in 11 years by 50 basis points.

The three, six and 12-month Euribor rates recorded all-time lows, respectively, of -0.605% on December 14, 2021, -0.554% and -0.518% on December 20, 2021.

Euribor is set by the average of the rates at which a group of 57 banks in the euro zone are willing to lend money to each other in the interbank market.