Lagarde to Leave ECB on 7 February 2027 as Rates Stay at 2.5 Percent and 12-Month Euribor Tops 3.3 Percent

The European Central Bank (ECB) left its three key interest rates unchanged on Thursday, holding the deposit facility rate at 2.50 percent, hours after President Christine Lagarde told the Governing Council she will step down on 7 February 2027. For the many households in Portugal with a variable-rate mortgage, the bigger story is that Euribor kept rising on the same morning.

According to the ECB's monetary policy press release, the rates on the deposit facility, the main refinancing operations and the marginal lending facility stay at 2.50 percent, 2.65 percent and 2.90 percent. The bank last moved on 10 September, when it raised rates by a quarter point. It said energy prices "have continued to rise", that financing conditions "have tightened" since its last meeting, and that it is "not pre-committing to a particular rate path".

In her opening statement, Ms Lagarde said euro area inflation rose to 3.8 percent in September from 3.2 percent in August, with energy inflation at 18.9 percent. She added that euro area mortgage rates rose to 3.6 percent in August from 3.5 percent in July, and that demand for mortgages "declined substantially given higher interest rates".

Lagarde to leave early

In a separate release issued on Thursday morning, the ECB said Ms Lagarde had informed the Governing Council and European Council President António Costa that she will leave on 7 February 2027. She has led the bank since November 2019. Her successor will be appointed by the European Council under Article 283 of the Treaty on the Functioning of the European Union. The ECB gave no reason for the timing.

Euribor up on all three tenors

Euribor rose on Thursday to 2.643 percent at three months, 2.973 percent at six months and 3.308 percent at 12 months, the Lusa news agency reported in ECO. On Wednesday the fixings stood at 2.618, 2.960 and 3.290 percent, according to euribor-rates.eu. The same source shows the 12-month rate at 3.029 percent on 1 September, and it recorded its biggest one-day rise since March in mid-September as oil prices climbed.

The same report, citing Banco de Portugal (Bank of Portugal) data for August, said the six-month rate was the reference for 40.3 percent of variable-rate loans for owner-occupied homes, the 12-month rate for 31.03 percent and the three-month rate for 24.27 percent.

What it means at your next revision

A variable-rate mortgage does not change every day. The payment is recalculated at each revision date, every three, six or 12 months depending on the Euribor tenor in the contract, using the rate in force for that revision. Simulations by Deco Proteste (a consumer rights association), published by Observador, use provisional October averages for a 150,000 euro loan over 30 years with a 1 percent spread:

• 12-month Euribor (average 3.232 percent): 736.33 euros a month, up 88.70 euros on the November 2025 revision.
• Six-month Euribor (average 2.974 percent): 713.88 euros, up 44.16 euros on the May 2026 revision.
• Three-month Euribor (average 2.632 percent): 684.67 euros, up 17.37 euros on the August 2026 revision.

These averages are not final until the month closes. Borrowers on a fixed rate, or on a mixed rate still in its fixed period, are not affected for now. Check the revision date and tenor in your contract to see when, and by how much, your own payment will move. Banks told the Bank of Portugal this week that its repayment cap made new mortgages slightly harder to get. Observador notes that markets still see a possible ECB rate rise in December, when new projections are due.