Euribor hits 4.147%, highest since 2008, heading for 4.5%

Euribor at 4.147%: €252 more per month on a €150,000 mortgage

How much higher can the Euribor go before something breaks? The indicator closed at 4.147%, a high not seen since 2008, after a week that started with it crossing 4% and ended flirting with 4.2%. June’s average stands at 3.978%. For a €150,000 mortgage with a 1% spread over 25 years, this means roughly €252 extra per month: €3,000 a year disappearing from accounts without notice. No one signs up for that on a Friday morning.

How much does the mortgage cost rise with Euribor at 4.147%?

The short answer: significantly more than most budgeted when they signed. With official rates at 4%, every point the Euribor rises translates into hard cash for the average homeowner. The calculation circulating in the thread is stark: a five-point difference equals €5,000 more annually per €100,000 of debt. Scale it down and it still hurts: according to the same math, someone owing €70,000 faces about €300 extra per month.

Here lies the crux. We are not talking about a theoretical textbook adjustment, but about draining disposable income from families who, in many cases, had already tightened their budgets due to inflation. The annual review turns family discussions into an unpleasant exercise in domestic arithmetic.

ECB raises rates in 0.25 increments; market doesn’t wait

The most repeated diagnosis points to the monetary authority. Raising rates in quarter-point steps, indefinitely and without a fixed calendar, while the Euribor runs ahead, leaves the central bank always one step behind the curve. The criticism isn’t that it raises rates, but that it does so late and in dribs and drabs: when circumstances demanded moves of 0.75 or a full point at once, they opted for gradualism. The result is an indicator that anticipates and a supervisor that chases.

And the journey isn’t over. As noted in the thread, the ECB President confirmed at least one guaranteed hike remains and left the door open for more. With autumn around the corner and energy as a geopolitical wildcard, the scenario of a harsh winter is back on the table.

From €600 to €900: the case explaining the wave of sales

One case cited in the thread is worth a hundred charts: a mortgage that jumped from €600 to €900 per month on an apartment rented for €750. The owner had €150,000 outstanding and a tenant who no longer covered the payment. Solution: sell, clear the debt, and pocket about €50,000 in cash. The buyer, paying upfront, expects to yield around €8,000 a year from rent, a 4% return.

This is the snapshot of the moment: real estate stops being a leveraged business and starts competing with Treasury Bills, which already yield over 3% and could approach 4% after summer. No tenants, no community fees, no repairs, and near-immediate liquidity. That some still prefer the apartment says a lot about attachment to property, or ignorance of alternatives. A very high percentage of the population continues, as argued in the thread, keeping savings in traditional deposit accounts, paying fees to hold small amounts, because it’s the only thing they know how to do.

Fixed or variable mortgage? The misunderstanding at every dinner table

One of the most widespread errors these months claims that no fixed-rate mortgage lasts forever, arguing banks limit them to five years. This is false. A fixed-rate mortgage is fixed for the entire life of the loan; what exists is the mixed type, with an initial closed period trinc by Euribor plus spread. Those who signed a fixed rate in 2020 or 2021 are shielded, and more than a few are starting to say aloud that those rates, then considered a mistake, were the best financial decision of their lives.

Those who didn’t have another option: threatening to move the mortgage to a competitor. As noted in the thread, switching banks, or just proposing it, often works to secure better terms.

Scenarios: 4.5% in July, 6% at Christmas, 8% in 2025

Here forecasts diverge sharply. The most prudent scenario sees 4.5% in July and a plateau from September onward. The intermediate view places 5.5% in December. The most aggressive speak of 6% for Christmas and a pause before seeing 8% or 9% in 2025. Few bet on returning to 3.5% by year-end, which was the official forecast recently.

With these differentials, the temptation to sell and take refuge in public debt will grow with each quarterly review. The question isn’t whether the Euribor breaks 4.5%. It’s how many families endure until it does.