Worrying news for those who have bank loans with variable interest rates: Euribor has risen to a new three-month high! This means that interest rates will also rise, making borrowing more expensive for consumers.

There is no denying the concern that arises when we are faced with this news. It is important to closely monitor Euribor fluctuations and understand how they affect our finances.

What is Euribor and how does it affect financial life?

Ever heard of Euribor? If you're not a banker or investor, chances are you don't know what you are. However, this is a rate that has a direct impact on our financial lives. In this article, we will explain what Euribor is, how it works and how it affects our finances.

What is Euribor?

Euribor means Euro Interbank Offered Rate, or Interbank Rate Offered in Euros. It is the interest rate that European banks charge each other when lending money. Euribor is calculated daily by the European Money Markets Institute (EMMI), based on the interest rates that a group of European banks charge each other.

Euribor is used as the benchmark for most variable interest rate loans in the eurozone. It is used as the basis for determining interest rates on personal loans, mortgages and other types of bank loans.

How is Euribor calculated?

Euribor is calculated daily by EMMI, which uses information provided by a group of European banks. EMMI determines the Euribor by taking the arithmetic mean of the interest rates that the banks in that group would charge each other if they borrowed money. Euribor is then published daily in Europe and is used as a reference for bank loans.

How does Euribor affect finances?

If you have a bank loan with a variable interest rate, such as a personal or mortgage loan, Euribor directly affects your finances.

When Euribor rises, the interest rate on your loan also rises, which means you'll have to pay more money in interest. On the other hand, if Euribor decreases, the interest rate on your loan will also decrease, which means you will pay less in interest.

Therefore, if you have a loan with a variable interest rate, it is important to follow the changes in the Euribor, as these will directly affect your finances.

How do banks use Euribor?

Banks use Euribor as a reference rate for setting their own interest rates. When Euribor rises, banks also raise their own interest rates, which means they earn more money in interest. On the other hand, if Euribor decreases, banks also lower their own interest rates, which means they earn less money in interest. This is why the Euribor is so important to banks and why they monitor its fluctuations so closely.

However, the Euribor is widely regarded as one of the most important and influential interest rates in Europe. It is used as the benchmark for most variable interest rate loans in the eurozone, which means that it directly affects the majority of people who have bank loans in the region.

It's important to keep up with changes to the Euribor and understand how they affect your finances. If you have a bank loan with a variable interest rate, be aware of Euribor fluctuations and plan your finances accordingly.

FAQ

What happens if Euribor increases too much?

If the Euribor rises too much, interest rates on bank loans will also rise, which could make borrowing more expensive for consumers.

What is the difference between Euribor and LIBOR?

Euribor is the interest rate that European banks charge each other when lending money, while LIBOR is the interest rate that British banks charge each other.

How can I follow changes in the Euribor?

You can follow Euribor changes through financial and news websites, as well as through bank and financial institution applications.

Does the Euribor always fluctuate?

Yes, Euribor is a variable interest rate and always fluctuates according to financial market conditions.

Does Euribor only affect bank loans in Europe?

Yes, the Euribor is mainly used as a reference for bank loans in the Eurozone.