Euribor rates are expected to exceed 1% in November. The increase affects nearly 300,000 families

Euribor rates are expected to rise in the near future and may even exceed 1% in November this year, according to ‘Diário de Notícias’ (DN), citing an economist who has analyzed the effects of inflation on the pockets of Portuguese people.

IMF economist Filipe Garcia believes that with inflation continuing this upward trend, the European Central Bank should raise interest rates by 75 basis points by the end of the year, which will also increase the Euribor .

The rate is now at 0.118%, but “the 12-month Euribor should be at 0.60% at the beginning of August, 1.06% at the beginning of November and 1.62% in a year”, underlined the specialist, in statements to ‘DN’. .

This increase, says the newspaper, will affect 292,000 families covered by Euribor and, from November, the index will rise to more than 1%.

Still with regard to the 3 and 6 month Euribor, which concern 382,000 and 495,000 families, an upward trend should be observed, with a return to positive values ​​expected in July. However, it is not until 2023 that they are expected to exceed 1%.

But what do these increases actually mean? When Euribor rises, consumers on variable rate credit will need to be prepared for higher expenses when contracts are reviewed.

The ‘DN’, based on the accounts of the consulting firm ‘Reorganiza’, adds that, given a contract of 100 thousand euros for 30 years and with a rate of 1%, an increase to 2% corresponds to an increase a deposit of 322 to 370 euros, or approximately 48 euros per month, or 15%.

On the other hand, according to the calculations of ‘Doctor Finanças’, taking into account a loan of 100,000 euros over 25 years and in which the spread (the profit margin of the bank) is 1.5%, if the rate increases by approximately -0.53% to 1%, the deposit should increase from 375 to 448 euros, or approximately 70 euros per month.

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