ECB signals cautious rate path as Portuguese mortgage payments could rise sharply in October

During a quarterly hearing before the European Parliament, ECB President Christine Lagarde emphasized a cautious approach to monetary policy, implying that rates are unlikely to rise again in October after recent hikes in June and September. Despite this stance, Euribor indexes have continued to ascend, with the six-month Euribor hitting 3.103%, a peak not seen since September 2024. For a typical Portuguese home loan with a variable rate, this could translate into a monthly payment increase of around €24.85 for a three-month Euribor, €49.46 for a six-month Euribor, and up to €90.89 for a 12-month Euribor when the next review occurs in October.

Economist Nuno Rico of DECO Proteste warns that borrowers on the 12-month Euribor will feel the greatest pressure. While some homeowners are protected by fixed-rate or mixed products, many who chose short fixed periods may already be facing the variable phase. The higher Euribor also makes savings certificates more attractive, with the base rate for new subscriptions set at its current ceiling.