The Euribor (Euro Interbank Offered Rate) is the interest rate at which major banks in the eurozone lend money to one another. It is Europe’s most important benchmark for variable-rate mortgages, and its fluctuations directly impact the savings of millions of Spaniards.
What exactly is the Euribor?
The Euribor is published for different terms (1 week, 1 month, 3 months, 6 months, 12 months). In Spain, the 12-month Euribor is used to calculate payments on variable-rate mortgages.
The mechanism: every business day, around 18 European banks report the rate at which they would be willing to lend money to other banks. The outliers are removed and an average is calculated—that is the Euribor for the day.
Euribor 2026: Current Level and Trend
The 12-month Euribor in 2026 is trading around 2.20–2.40%, having fallen sharply from its all-time high of 4.16% in October 2023. This decline reflects the ECB’s rate cuts, which lowered the deposit rate from 4% to 2.00% between June 2024 and early 2026.
| Period | 12-month Euribor | Context |
|---|---|---|
| January 2022 | -0.50% | ECB negative rates |
| December 2022 | 3.00% | ECB raises rates aggressively |
| October 2023 | 4.16% | All-time high |
| December 2024 | 2.50% | ECB cuts to 3% |
| May 2026 | ~2.30% | ECB at 2.00% |
How the Euribor affects your variable-rate mortgage
If you have a variable-rate mortgage tied to the Euribor, your payment is reviewed every 6 or 12 months by adding a fixed spread to the Euribor rate in effect at that time.
Example: mortgage with Euribor + 0.70%, €200,000 outstanding over 20 years:
| Euribor | Total rate | Monthly payment | Annual interest |
|---|---|---|---|
| -0.50% | 0.20% | €855 | ~€400 |
| 4.16% | 4.86% | €1,296 | ~€9,700 |
| 2.30% | 3.00% | €1,109 | ~€6,000 |
The drop in the Euribor from a high of 4.16% to ~2.30% represents a monthly savings of ~€187 for this homeowner.
Fixed or variable-rate mortgage in 2026?
With the 12-month Euribor at ~2.30%, 20–30-year fixed-rate mortgages are being offered at around 2.80–3.50%. The spread between fixed and variable rates has narrowed significantly compared to 2023.
Rule of thumb:
- Variable-rate mortgage: beneficial if the Euribor continues to fall or stabilizes. Risk: it could rise again.
- Fixed-rate mortgage: certainty of monthly payments, regardless of what the ECB does. You pay a premium for that certainty.
- Hybrid mortgage: fixed for 5–10 years, then variable — a balance between initial stability and taking advantage of potential future rate cuts.
Euribor and savings rates: the relationship
Euribor and savings account rates move in the same direction as the ECB rate:
- When the ECB raises rates → Euribor rises → deposits and interest-bearing accounts offer higher returns
- When the ECB cuts rates → Euribor falls → banks reduce savings interest rates
Currently, with the ECB at 2.00%, the best savings accounts offer between 2.27% (Revolut) and 2.02% (Openbank). If the ECB continues to cut rates, these rates will fall.
Will the Euribor rise or fall in 2026?
Market forecasts (Euribor futures) for May 2026 point to:
- The ECB rate stabilizing at 1.75–2.00% throughout 2026
- 12-month Euribor trading between 2.00%–2.50% by the end of 2026
- Possible rise if inflation picks up; further decline if there is a recession
Key uncertainty: the US-EU trade conflict and the impact of Trump’s tariffs on European inflation could change the ECB’s forecasts.
Difference between Euribor and €STR
The €STR (Euro Short-Term Rate) is an alternative index introduced in 2019 that reflects overnight lending rates. It currently hovers around 2.00% (the same as the ECB deposit rate). Money market ETFs (C3M, XEON) track the €STR — which is why they behave like "savings accounts" offering the ECB’s return without a fixed term.