Euribor explained: how it reaches your monthly payment

On 24 July 2026, the 6-month Euribor stood at 2.723%. Nobody at your bank decided that number in a meeting. It was born in Brussels, the result of a calculation that runs every business day, with no connection at all to the spread your account manager offered you. Understanding where Euribor ends and the bank’s decision begins is the difference between reading the news with anxiety and reading it while doing the maths.

What it actually is

Euribor (Euro Interbank Offered Rate) is the average of the rates at which a panel of European banks say they’re willing to lend each other money, unsecured, in euros. It isn’t the price you pay — it’s the wholesale price, between banks, that then serves as the reference for (almost) every loan indexed to it in the eurozone, including yours.

The number is published by the EMMI (European Money Markets Institute), in Brussels, every business day. It’s an institution, not a specific bank, and the calculation follows a regulated methodology — which is why today’s Euribor is exactly the same whether you take out a loan at Caixa, Santander or any other bank. What changes from bank to bank is the spread they add on top, never the index rate itself.

Three terms, three readings of the market

Euribor isn’t a single number — it’s published for 3, 6 and 12 months, and each term reflects a different expectation about what’s coming in monetary policy. On 24 July 2026, the three figures were: 3M at 2.488%, 6M at 2.723% and 12M at 2.993%.

Notice the progression: the longer the term, the higher the rate tends to be. That’s because the 12-month Euribor prices in the market’s expectation of where interest rates will be over the coming year, not just right now — if investors anticipate rises, the 12M moves first. The 3M, being closer to the present, reacts faster to any shift in ECB policy, but it takes less to swing because it covers less time.

How this reaches your contract

The rate you actually pay — the TAN (nominal annual rate) — comes from a simple sum: Euribor for the chosen term + the spread fixed by the bank in the contract. The spread is the bank’s margin, and it stays practically unchanged for the whole loan (it typically only changes if you stop meeting some commercial condition, like direct-depositing your salary). It’s Euribor that moves.

The review doesn’t happen the instant rates move: your contract sets a review interval — reviewed on a 3-month, 6-month or 12-month cycle, that is, every 3, 6 or 12 months — and on that date the bank recalculates the payment, normally using the average Euribor from the month before the review. Between reviews, the payment stays frozen, even if Euribor rises or falls every single day.

The maths: €200,000, Euribor 6M, 0.9% spread

Let’s go to the concrete example. A €200,000 loan over 30 years, indexed to the 6-month Euribor (2.723%) with a 0.9% spread, has a TAN of 3.623%. The monthly payment, under the French amortization system (the constant-installment method), comes to €911.88.

Scenario	Euribor 6M	TAN	Monthly payment
Current (24-07-2026)	2.723%	3.623%	€911.88
If it rises 1 point	3.723%	4.623%	€1,028.04

The difference is €116.16 a month — almost €1,394 more a year, just because Euribor went up one percentage point. It’s this mechanism, not the bank’s mood, that makes the payment swing whenever the news talks about the ECB raising or cutting rates. If you want to test your own scenario — a different loan amount, a different term, a different spread — the mortgage payment calculator does this maths in seconds.

3M, 6M or 12M: a question of temperament

Here’s the central point: choosing between the 3, 6 or 12-month Euribor isn’t a question of financial mathematics — it’s a question of how you prefer to feel the variation. With the 3M, the payment adjusts more often, but each adjustment tends to be small — you go up or down a little every quarter, tracking the market closely. With the 12M, you spend the year with the same payment, but when the review does arrive, the jump can be bigger, because it absorbs everything that changed over those twelve months all at once.

There’s no “right” term — there’s whatever fits best with your tolerance for uncertainty. If you prefer short-term predictability, even with more adjustments, you’ll lean toward the 3M or 6M. If you’d rather not think about it for a whole year, accepting that the next review might sting more, you’ll pick the 12M.

When Euribor went negative

Between 2015 and 2022, Euribor spent long years in negative territory — and contrary to the myth, there’s no “zero floor” in Portugal protecting the banks: Law 32/2018 obliges lenders to pass through negative Euribor in full, even when it eats into the spread. If Euribor plus spread falls below zero, the amount in the client’s favor is deducted from the outstanding capital in the following payments. What that period made clear is that Euribor really can go below zero — it isn’t a theoretical curiosity, it has happened for years in a row.

Fixed, variable or mixed, in four sentences

Fixed rate: the TAN doesn’t change during the agreed period (or the whole loan), you always pay the same, and the risk of Euribor rising passes to the bank. Variable rate: you follow the chosen Euribor in real time, with whatever falls and rises that implies. Mixed rate: you start with a fixed period (usually the first years) and then move to variable, combining initial predictability with later exposure to the index rate. None of the three is objectively better — it depends on what you can (and want to) absorb if Euribor rises.

If you’re comparing proposals from different banks, it’s worth knowing that there are credit intermediaries registered with Banco de Portugal, paid by the bank and not by you, who can present several proposals side by side — you don’t have to close on your own with the first one that comes along.

Your next calculation

You now know how Euribor turns into a payment — what’s left is seeing the number that applies to you, with your loan amount, your term and the spread you get offered. That’s the calculation, including the effect of the index rate rising or falling, that the next calculator does for you.