The Euribor Recorded Its Biggest One-Day Rise Since March on Monday, With Oil at 107 Dollars Behind It
Simulations point to 25 to 80 euros a month more on a 150,000 euro loan revised in October. Which month it reaches you depends on a date written into your own contract.
The Euribor rates that set the monthly payment on most Portuguese variable-rate mortgages recorded their largest single-day rise since March on Monday, and households whose contracts are revised next month will see the result on the bank statement.
The six-month rate rose 0.116 points and the twelve-month rate rose 0.152 points in one session, the biggest daily moves since 24 March. Between them those two maturities are indexed to more than two-thirds of the variable-rate home loan contracts in Portugal. Friday's fixings, the last published before the jump, had the six-month at 2.820 percent and the twelve-month at 3.160 percent, both already at roughly two-year highs. The three-month stood at 2.647 percent and the one-month at 2.388 percent.
What moved
The cause sits outside the euro area entirely. Oil reached 107 dollars a barrel on Monday and natural gas rose more than 5 percent to its highest level since 2023, after Saudi Arabia shut down a pipeline that serves as an alternative route to the Strait of Hormuz, and after Oman postponed the meeting at which Iran and the Gulf states were to discuss the strait's future. Hormuz has been intermittently blocked since 28 February.
Market rates follow from there. Interbank lending rates price in what investors expect central banks to do, and higher energy prices sustained for longer feed through to consumer prices, which in turn forces the European Central Bank's hand. Euro area inflation reached 3.3 percent in August, and the ECB's own projections now show inflation taking at least two years to return to the 2 percent target. Markets are pricing two further increases in ECB rates before the end of the year.
Filipe Garcia, an economist and president of the market consultancy IMF, Informação de Mercados Financeiros, put the problem in terms of what is missing rather than what has happened. "The truth is that there is no light at the end of the tunnel, no positive factor, in terms of trends in energy prices," he said. "The market is waking up to the reality of where we are on gas, refined products and energy. Even if the war in Iran is resolved, a great deal would have to happen in refined products for the situation to normalise."
What it costs a household
The arithmetic runs on a delay. A variable-rate mortgage in Portugal resets on the anniversary of its indexing period, so a rate move on Monday reaches different borrowers in different months. For contracts revised next month, simulations published by ECO for a loan of 150,000 euros over 30 years with a spread of 1 percent point to an increase of between 25 and 80 euros a month, depending on which maturity the contract is indexed to.
That lands on top of a squeeze that has been building all year. In August, interest alone accounted for 49.5 percent of the average mortgage payment in Portugal. Savers get no compensating benefit from the same move, because the Euribor has already passed the 2.5 percent ceiling written into Portugal's savings certificates, so further rises no longer pass through to the state's retail savings product.
Anyone on a variable rate who has not checked their indexing month is worth five minutes with the loan contract. It determines whether this week's move reaches you in October, or some months from now.
