Interest rate on Euribor increases to 2.114% in August, following six sequential months of diminishments

The Euribor rate, a key indicator for mortgage interest rates in the eurozone, is expected to end 2025 around 2%, according to Sergio Carbajal, Head of Mortgages at Rastreator. This prediction is supported by Colombellin, Director of Mortgages at iAhorro, who also suggests that the daily data of Euribor throughout August shows "very similar" behavior to previous months, indicating Euribor stability.

The latest economic activity data, such as the eurozone's composite PMI, point to a slight rebound in growth. This growth, coupled with the ECB's recent 25 basis points interest rate cut to 2%, suggests a stable economic environment.

However, the Euribor rate for August 2021 was 2.114%, marking a 35 basis points increase from the July rate of 2.079%. This slight increase has been attributed to several factors. Colombellin attributes the current rise in Euribor to global political and economic instability. He believes it should not cause alarm and is a "temporary movement".

The Kelisto comparator attributes the monthly increase in Euribor to a change in expectations regarding interest rates. They predict that Euribor will end 2025 between 1.9% and 2%. This prediction, along with the stability indicated by the daily data, suggests that the Euribor's slight increase in August is a "minimum oscillation" and "no significant variation".

The likely immediate political and economic events leading to the increase in Euribor in August 2021 include ongoing uncertainties and partial clarifications in U.S. trade tariffs and tensions, particularly in the US-China trade conflict and EU's stance in WTO disputes, which affected international trade dynamics. Additionally, persistent inflation pressures in the Eurozone and Germany around 2%, prompting expectations of tighter monetary policy from the ECB, and the ECB's strategic review announced around that time signaling a commitment to more decisive measures against deviations from its 2% inflation target, all contributing to rising interest rates including Euribor.

Exceptional uncertainty could vary this figure in the coming months, according to the Kelisto comparator. HelpMyCash.com, a financial product comparator, shares this opinion. Due to this, the European Central Bank (ECB) does not have as much urgency to apply further rate cuts in the short term.

For homeowners with variable mortgages, this slight increase in Euribor could mean a change in monthly payments. A person with a variable mortgage of 150,000 euros over 30 years with a differential of 0.99% over Euribor will see their monthly payment decrease by 88.8 euros if their interest rate is reviewed at the August level. This results in an annual reduction of 1,065 euros.

In conclusion, while the Euribor rate has seen a slight increase in August 2021, experts predict that it will stabilize and remain around 2% by the end of 2025. This slight increase should not be interpreted as a "change in trend" but rather a "minimum oscillation within the normal behavior of the reference index".

Interest rate on Euribor increases to 2.114% in August, following six sequential months of diminishments