Three-month Euribor (the indicator that most loans in euros granted by local banks are tied to) has gone up by 0.3% since March, to 1.43% a year, double its value in the similar period of last year.
This means the installment on a EUR50,000 mortgage loan granted over 25 years at an annual percentage rate of 8.5% a year, will increase by 10 euros (40 lei) at the end of the month, to EUR390.
Further bad news is expected in the future, with analysts estimating the key interest rate on euro-denominated loans will climb to 2% at the end of the year, which could see the Euribor above the 2.25% a year threshold. A 2.25% a year Euribor in December would add 30 euros to the monthly installment.
“The increase by one percent of the Euribor by the end of the year is a plausible scenario. But the degree to which clients will feel the increase of interests on euro-denominated loans depends on the exchange rate trend. The leu has strengthened this year, although the pressure of the interest rate increase has not been fully absorbed by the exchange rate trend,” comments Lucian Anghel, BCR chief economist.