The Euribor rate has risen in a single day by the largest increase in almost 20 years. How will this affect mortgages?

BarcelonaThe armed conflict in the Middle East also has financial repercussions. The Euribor, the benchmark for variable-rate mortgages, registered its largest daily increase in almost 20 years on Tuesday, specifically since 1998. This one-year indicator climbed to 2.552%, an increase of 0.185 percentage points. Normally, this benchmark fluctuates by only a few thousandths of a percent each day, but this time it experienced a 7.8% rise in a single day.

This surge marks three consecutive weeks of increases, which intensified following the US and Israeli attacks on Iran. With Tuesday's result, the one-year Euribor is at the same level as a year ago and as it was in November 2024. The Euribor is the interest rate at which banks lend money to each other. The upward trend indicates that banks expect further interest rate hikes from the European Central Bank (ECB).

"We are not at the critical levels of 2023 or 2024, when the Euribor reached 4%," clarifies Olivia Feldman, founder of the financial comparison website Helpmycash. In any case, she adds, "it is a reminder that the cost of money could rise again." And the main consequence affects variable-rate mortgages, as they could become more expensive when they are reviewed. In any case, the indicator for the annual review is the monthly average, which is currently at 2.332%, similar to the level of March a year ago, when the trend was downward. These movements, in any case, affect those with variable-rate mortgages and not those with fixed-rate mortgages, which have been the most widely sold for months. Nevertheless, the current uncertainty and upward trend affect those planning to take out a mortgage to buy a home, because if the situation worsens, rates could be higher for both variable-rate and fixed-rate mortgages.