Euribor reaches highest level since late 2024 as ECB rate hike takes effect
The six-month Euribor rate climbed to 2.978% on 18 September 2026, reaching its highest point since October 2024. The 12-month rate also rose, hitting 3.343%, its strongest level since July or August 2024. Both rates have been rising since the European Central Bank increased its key interest rates on 10 September.
What this means for mortgage payments in Portugal
The Euribor is the main reference rate used for variable-rate home loans in Portugal. When it goes up, the interest rate on loans linked to it also increases. Around 39.87% of all variable-rate home loans tracked by the Banco de Portugal are indexed to the six-month Euribor, making it the most common benchmark since January 2024.
Another 31.26% are linked to the 12-month Euribor, and 24.40% use the three-month rate. For borrowers with a six-month Euribor loan, the monthly payment is adjusted twice a year. Those on a 12-month rate see one annual revision.
Market expectations suggest the 12-month Euribor could climb further, reaching approximately 3.593% by December 2026. This would push monthly instalments higher for anyone whose loan revision date falls after that point.
Why rates are rising now
On 10 September 2026, the European Central Bank raised its deposit facility rate by 25 basis points to 2.50%. This move, aimed at controlling inflationary pressures partly linked to the conflict in the Middle East, ended a period of stable rates.
The ECB had last raised rates in June 2026, also by 25 basis points, breaking a cycle of seven consecutive meetings where rates were held steady. The next monetary policy meeting is scheduled for 28 and 29 October in Frankfurt.
While current Euribor levels are rising, they remain below the peaks seen in early 2024. The six-month rate's historical high for that year was 3.912% on 1 March 2024, with the 12-month rate peaking at 3.744% on the same day.
How the Banco de Portugal is managing risk
New macroprudential rules from the Banco de Portugal took effect on 1 August 2026 to protect households from payment shocks. The general limit for the debt service-to-income ratio (DSTI) was reduced from 50% to 45%, meaning total monthly loan payments should not normally exceed 45% of a household's net income.
Other changes include simplified maximum loan terms: 40 years for borrowers aged 35 or younger, and 35 years for older borrowers. Loan-to-value limits now cap financing at 90% for permanent home purchases. The government has also reinforced its public guarantee for home loans for young people, adding 100 million euros in funding from 2 September.
Many borrowers are now opting for mixed-rate home loans, which became the dominant choice for new contracts from July 2026 onwards. These products offer a fixed rate for an initial period, shielding borrowers from immediate Euribor volatility.
How the rates are set
The Euribor is calculated daily as the average of rates at which a panel of 21 banks in the eurozone are willing to lend to one another on the interbank market. In August 2026, the monthly average for the three-month Euribor was 2.513%, while the six-month average reached 2.713% and the 12-month average stood at 2.954%.
