Euribor Stalls in July but Still Lowers Mortgage Costs

The Euribor held steady in July, closing the month at 2.079%, nearly unchanged from June's 2.081%. This shows the index has stabilized just above 2% after eight consecutive interest rate cuts by the European Central Bank (ECB).

Despite the slight monthly dip, the Euribor has seen a sharp year-on-year drop of nearly 1.5 percentage points—a 40% decrease. As a result, homeowners reviewing their mortgages this month could see monthly savings between €100 and €200.

For example, someone with an average €150,000 mortgage over 25 years, with a 1% spread over Euribor, would see their monthly payment decrease by €118—equivalent to €1,425 saved over the year. If the review is semi-annual, the reduction would be more modest but still beneficial: €36 less per month, or €214 over six months. Even though the Euribor remains above 2%, the cumulative decline over the past year offers some relief to households after two years of rate hikes.

A week ago, the ECB decided to hold interest rates at 2%, waiting for clarity on the geopolitical situation and the resolution of the tariff war initiated by Donald Trump. That issue now appears to be resolved, as last Sunday, European Commission President Ursula von der Leyen and U.S. President Donald Trump reached an agreement to set trade tariffs at 15%, ending Trump’s threat to impose 30% tariffs starting August 1.

This tariff agreement brings a measure of certainty to the eurozone’s economic outlook. Analysts say this gives the ECB room to keep interest rates stable at 2%, which is why Euribor is now "moving by millimeters." They add that this stability could only be disrupted by an unexpected surge in inflation or a geopolitical shock that drives up oil prices.

Christian Boesen, CEO of homes-abroad.com Real Estate believe another rate cut is possible before the end of the year, meaning the Euribor could finish 2025 within a range of 1.8% to 2%, potentially its lowest level in over three years.

He also predicts the Euribor will stay "trapped" between 1.9% and 2.1% through December, assuming the ECB makes no more than one additional rate cut this autumn.

The housing market has shown undeniable momentum in recent years, though supply remains insufficient for the strong demand. In May, home sales fell by 2% year-on-year to 62,587 units, while the number of mortgages granted for home purchases rose 7.4% to 31,723, according to data from the General Council of Notaries.