August Mortgage Bills Climb Across Portugal as the Euribor's July Rebound Feeds Through

Households across Portugal with a variable-rate mortgage are about to feel a familiar pinch. The Euribor — the euro-area interbank rate that sets the cost of most Portuguese home loans — turned higher in July, and for the many borrowers whose contracts are revised in August, that reversal feeds straight through to the monthly bill.

The July averages tell the story. The three-month Euribor came in at 2.425%, the six-month at 2.647% and the twelve-month at 2.855% — all up on the month, after a long stretch in which falling rates had been quietly trimming repayments. In Portugal, where the vast majority of mortgages are variable and pegged to one of these three tenors plus a fixed spread (the bank's margin), the direction of the index is the direction of your payment.

What the reset looks like

Take the standard worked example lenders use: a €150,000 loan over 30 years with a 1% spread. For a borrower on the twelve-month Euribor whose annual revision lands in August, the instalment climbs to €703.64 — about €64.83 more than a year earlier. On the six-month index, the payment rises to €685.94, some €42.40 above February's revision; on the three-month index it reaches €667.30, up €20.65 since May.

The gap between the tenors matters because Portuguese borrowers are spread across all three. As of May, six-month contracts accounted for roughly 39% of the outstanding stock of variable-rate loans, with twelve-month contracts near 32% and three-month deals close to 25%. The upshot: the exact size of the August increase depends on which index your contract tracks and when it was last reset.

A silver lining for savers

The same move that lifts mortgage bills flatters cautious savers. The State's Certificados de Aforro (savings certificates) in the current Série F pay a base rate tied to the three-month Euribor, subject to a ceiling of 2.5%. With the index now at 2.425%, that base remuneration is pressing right up against its cap — near the maximum the product can offer before a permanence premium is added for longer holdings. For anyone weighing where to park cash, the certificates remain competitive precisely because the Euribor has stopped falling.

What this means for expats

• Check your revision date: your instalment only changes when your contract's index resets — monthly, half-yearly or yearly. If yours revises in August, expect the new, higher figure to appear on the next direct debit.
• Know your tenor: a loan on the twelve-month Euribor moves in bigger, less frequent steps than one on the three-month; neither is automatically cheaper over time.
• New borrowers face a tighter door: the increases land just as the Bank of Portugal caps household loan repayments at 45% of net income from 1 August, which can shrink how much a new applicant is allowed to borrow.
• Savings are worth a second look: with rates firmer, the State's certificates and banks' term deposits are again drawing money away from current accounts, as the fight for savers intensifies.

None of this points to a return to the punishing rates of two years ago; the Euribor remains far below its 2023 peak. But July's rebound is a reminder that the easing cycle is neither smooth nor guaranteed. For a country where housing costs already dominate household budgets — a strain visible in soaring rental demand and emergency support for tenants facing eviction — even a €65-a-month swing is money that has to come from somewhere. It also arrives with inflation still at 3.0%, keeping the squeeze on real incomes very much alive.