Do you think that ECB interest rates will reach 4% as early as 2023? The OECD believes in it. If you are right, the house payment will increase sharply

If the OECD forecast is confirmed, Euribor rates could reach the level of 5%, as has happened in the past. The monthly payment for those who have a housing loan can double. See the simulations

The President of the European Central Bank (ECB), Christine Lagarde, made a point of reaffirming this week what her main mission is. And he made a point of recalling that this mission is engraved in the European treaties: to guarantee price stability.

Lagarde, who was speaking at an event in Frankfurt, Germany, did not say as she believed there were doubts among those who heard her. I told him to reassure him that he would serve the warrant. And told him to re-report What are you planning to do to accomplish it.

“We will do what we have to do, which is to continue to raise interest rates at the next meetings,” said the head of the ECB.

As Lagarde explained on the same occasion, they won’t because they want to reduce economic growth. Or because they want to trigger a recession in the euro zone. They will do this because they want to reduce current inflation from nearly 9% to 2%.

And in the midst of so much certainty, doubts center on the extent of the rise in interest rates.

In the second half of this year, the central bank has already raised rates from zero to 1.25%.

On October 27, when the ECB meets again to decide on an interest rate hike, the only question is whether the hike will be 0.75 points or 0.5 points.

And from there, there is no great doubt either. Interest rates will continue to rise. How many? How far ? We do not know.

But the Organization for Economic Co-operation and Development (OECD) has a prospect: rates will rise to 4% by 2023.

In the interim forecast he presented this week, this is the scenario the Paris-based organization is working with.

“In the euro zone, the ECB is facing a difficult environment, given the outlook for increasingly widespread inflationary pressures”, underlines the OECD, adding that “the main refinancing rate should rise to 4% in 2023”.

Rate on 4% only twice since 1999

If the OECD scenario materializes, it will only be the third time since 1999 that the ECB has set interest rates at the 4% level.

The first dates back to 2000. The ECB started raising its main policy rate a year earlier, from 2.5% to 3%, and in October 2000, rates reached 4.75%. They remained above 4% until September 2001.

The effect on Euribor rates more than accompanied this rise. In June 1999, they showed the main signs of an increase from a level of around 2.6%. In August 2000, they were at the 5% level.

The second time in ECB history that the bank raised rates to the 4% level was between 2006 and 2008. The first hike was in March 2006, when the rate rose from 2.25% to 2.5%. In July 2008, the rates reached 4.25% and remained above 4% until October.

The effects on Euribor rates started to be felt in August 2005 when they were at a level slightly above 2%. In October 2008, they were around 5.5%.

This year, the ECB began raising rates in July, from zero to 0.5%, and increased further this month, taking the rate to 1.25%.

The rise in interest rates by the ECB was also anticipated by Euribor rates. The rise began significantly in February, with all rates in negative value. Currently, the 3-month Euribor is above 1.2%, the 6-month Euribor is above 1.8% and the 12-month Euribor is above 2.6%.

An Euribor above 5% would lead to a (sudden) rise in maturities

If the OECD outlook materializes and if, as in the past, Euribor rates reach the 5% level, mortgage maturities would increase significantly.

In the case of a loan of 150,000 euros, at 30 years, with a spread of 1%, indexed to Euribor 6 months, the monthly payment would go from just over 450 euros to almost double.

Down payment with 5% Euribor

150 thousand euros, 30 years, spread 1%

Euribor 6 months



go pay




The same loan, but pegged to Euribor for 12 months, would have an increase in maturity from nearly 500 current euros to nearly 900 euros.

Down payment with 5% Euribor

150 thousand euros, 30 years, spread 1%

Euribor 12 months



go pay




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