Portuguese Mortgages Face Mixed Euribor Signals: Short Rates Fall, 12-Month Rises

Portuguese borrowers woke up to an unusual split in their Euribor benchmarks: the short-term references that dictate many mortgage instalments slipped, while the 12-month tenor nudged higher again. With the European Central Bank gathering in Frankfurt later today, the divergent path is fuelling a fresh round of number-crunching at banks, real-estate portals and kitchen tables across the country.

Quick glance: what moved while you slept

• 3-month Euribor: 2.049%, down for the second straight session

• 6-month Euribor: 2.144%, edging lower as well

• 12-month Euribor: 2.291%, hovering near Tuesday’s eight-month peak of 2.315%

The pattern, last seen in early spring, means most Portuguese households will feel only a faint change in their next mortgage revision—but direction and timing depend heavily on which index they signed up for.

Why this matters in Portugal

More than 70% of outstanding home loans in Portugal float with one of the three Euribor maturities. According to Banco de Portugal, the 6-month rate now anchors 38.5% of variable-rate contracts, the 12-month 31.75%, and the 3-month roughly a quarter. Even minor fluctuations can tilt monthly prestações by €10–€20, a figure that often decides whether a family tightens or relaxes its budget heading into 2026.

The numbers behind the headline

The 12-month fixing has risen almost 10 basis points since Friday, reclaiming territory last visited on 2 April. By contrast, the 3- and 6-month rates have drifted down from their early-December highs, dragging the provisional monthly average for December to 2.148%—already below the 2024 full-year mean.

Three concurrent forces are behind the split:

ECB outlook: Traders are baking in a possible rate trim in the first quarter of 2026, pushing shorter maturities down.

Inflation uncertainty: Sticky services inflation keeps longer expectations elevated, propping up the 12-month quote.

Interbank liquidity: A year-end surge in euro-area deposits is easing immediate funding needs, lowering the price of overnight and 3-month money.

What it does to your mortgage bill

• 12-month contracts: revisions scheduled for January should fall by a few euros because December’s average is still below November’s 2.217%.• 6-month contracts: the first uptick in nearly two years looms; banks project an extra €6–€9 per €100,000 financed.• 3-month contracts: households may see a marginal €2–€3 rise, as their reference resets more frequently and mirrors the early-November crest.

Financial advisors urge borrowers to verify whether their spread—often between +0.9 pp and +1.5 pp—still reflects market practice, and to weigh partial amortisations before 31 December to cut 2026 interest costs.

Frankfurt in the spotlight

Christine Lagarde will step to the microphones tomorrow after the final Governing Council meeting of the year. The ECB has held its deposit rate at 2.75% for three consecutive meetings after eight cuts between June 2024 and July 2025. Analysts in Lisbon and Madrid expect another ‘wait-and-see’, but any tweak in the statement’s language on inflation could jolt the 12-month Euribor past the psychological 2.35% line—or send it sliding back toward 2.20%.

Looking ahead: 2026 scenarios

• Most forecasters now model the 12-month Euribor at 2.1 %–2.5 % by end-2026.• Bank of Portugal pencils the 3-month rate at 2 % next year, easing to 1.9 % in 2026.• International desks—from Bankinter to Funcas—converge on a gently falling curve, but warn that energy shocks or wage surprises could flip the script.

Homeowners weighing a switch to fixed-rate products still face offers above 4 %, a reminder that today’s Euribor cooling is relative. As one Lisbon mortgage broker quipped, “The era of free money is gone; now it’s about shaving cents, not Euros.”

Take-away for households

Check the exact Euribor maturity in your loan contract.

Ask the bank for the projected new instalment two weeks before the next reset.

Consider lump-sum repayments or term extensions if the 6-month uptick pressures your budget.

Keep an eye on tomorrow’s ECB press conference—the tone alone can tilt January’s Euribor averages.

In short, the Euribor roller-coaster continues, but the drops are shorter and the climbs gentler than a year ago. For Portuguese families, the ride is no longer terrifying—just bumpy enough to demand vigilance every time the calendar turns.