Euribor Tops 3 Percent: 100,000 Euro Loan Payment Up 34

The six-month Euribor, the reference rate to which most euro indexed home loans in Serbia are tied, has reached three percent, RTS reported. At the end of February the rate stood at 2.128 percent, and by September 24 it had climbed to 2.991 percent, a rise of about 40 percent in seven months, according to calculations by Bloomberg Adria.

Euribor is the benchmark interest rate on the European money market, the rate at which banks lend to one another. Banks use it as the base for calculating interest on loans indexed to the euro, adding their own contracted margin on top. A change in the rate does not feed through to the monthly payment right away: banks adjust the interest rate within the deadlines set out in the loan agreement, depending on whether the loan is tied to the three month or the six month Euribor.

A concrete example shows the scale of the shift. For a 100,000 euro loan taken out over 30 years, the monthly payment stood at 537 euros six months ago and is now about 571 euros, Bloomberg Adria calculated. The difference of 34 euros a month corresponds to a rate increase from about 5 percent to about 5.6 percent, in line with the movement of Euribor.

Why Euribor Is Rising

According to the Quarterly Monitor of the Foundation for the Development of Economic Science (FREN), Euribor has risen by 0.9 percentage points since the start of the year. The European Central Bank raised its benchmark rate in June and added another 0.25 percentage points in September, Biznis.rs reports, citing the same source.

Zoran Grubisic, dean of the Belgrade Banking Academy, told RTS that the current pressure on interest rates is linked to external factors, above all higher oil prices and rising energy costs, and that it does not have to be permanent.

How Much Protection Do NBS Limits Offer

Borrowers with home loans approved earlier are covered by a legal safeguard. The National Bank of Serbia (NBS) explained to Bloomberg Adria how the mechanism works:

Regarding the interest rate caps in effect during 2026, variable rate housing loans cannot be charged a nominal interest rate higher than the average weighted interest rate for existing variable rate housing loan agreements in the same currency, or currency of indexation, increased by one fifth.

The average weighted interest rate for existing variable rate home loans in euros stands at 5.09 percent for the period from June 1 to November 30, 2026, which puts the maximum allowed nominal rate at 6.11 percent. In the January to May 2026 period that average rate was 4.90 percent, with a ceiling of 5.88 percent.

The pushback against the rate jump also shows up in the structure of borrowing itself. The share of home loans with a fixed interest rate rose from under 20 percent in September 2023 to 49 percent in June 2026, according to NBS data on bank lending activity.

New Loans Remain Calmer for Now

The picture looks somewhat different for newly approved loans. The average interest rate on new euro denominated home loans fell in August, to 4.4 percent. The broader category, which alongside home loans also includes other euro and euro indexed loans to households, stood at 4.7 percent, 1.4 percentage points lower than in June 2024, when the NBS began easing monetary policy. That 1.4 percentage point drop applies to the broader category, not specifically to home loans. Bloomberg Adria, citing the NBS’s August Inflation Report, puts the rate on new home loans in June at 4.5 percent.

The authors of the FREN Quarterly Monitor expect a mild rise in real interest rates on euro indexed loans in the period ahead, alongside stagnant or falling rates on dinar loans.

The National Bank of Serbia has also announced a law on financial advisors, meant to give citizens a clearer picture of the risks before they borrow, including simulations of different repayment scenarios for long term loans, Dnevnik reports.