Individuals holding housing loans should note that the Euribor rate used for revising a variable interest rate credit contract (whether over 3, 6, or 12 months) is based on the previous month’s average when the contract was signed, as per DECO PROTeste.
“Thus, if the contract was signed with the bank in October, the considered average would be that of September. Normally, the month when the contract with the bank is concluded tends to coincide with the signing of the deed, but the first can occur up to 30 days before the second,” the consumer protection organization notes.
This implies that, “in a scenario where the deed was signed in October, but the contract with the bank was finalized in September, the Euribor average used as a reference would be that of August.”
“In summary: the relevant date is always that of the contract signing with the bank. This information can be found in the standardized European information sheet (FINE) that accompanies the financing contract,” the organization concludes.
What is Euribor?
The organization further explains that “Euribor is a variable indicator reflecting the interest rate at which banks lend money to each other within the eurozone.”
“Derived from the average of interest rates reported by 52 major European institutions, this index is determined daily by the European Banking Federation. Euribor directly affects the monthly installment amount of housing credit. When Euribor rises, the installment increases; when it falls, the installment decreases,” as stated on the organization’s website.
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