Interest rates | Interest rates on mortgages rose – The largest daily increase in one-year euribor in almost a year

Home loans the popular reference interest rate, the twelve-month euribor, rose significantly on Monday.

The one-year euribor was quoted at 3.633% on Monday, while on Friday it was 3.537%. The last time the interest rate was above 3.6 percent was two weeks ago.

The daily increase of 0.096 percentage points is the largest since the end of March 2023.

Market rate has been sawing in the 3.5-3.6 percent range this year, as the market has tried to price in the timing of the European Central Bank's (ECB) interest rate cuts.

Euribor rates have recently moved in the same direction as the long-term interest rates on euro area government bonds.

The US labor market statistics published on Friday raised the interest rates on government bonds strongly both in the US and in the Eurozone on Friday.

“Very strong labor market data lowered market expectations for interest rate cuts by the US central bank,” wrote Nordea bank analysts in their morning review of the bank on Monday.

Last on Thursday of the week it was revealed that inflation in the euro area slowed down less than expected in January. It would indicate that the ECB would not be able to start interest rate cuts as expected.

Money market investors are currently pricing in the ECB lowering its key interest rate by a total of 1.3 percentage points during the current year. The first rate cut is estimated to take place in April with a probability of around 50 percent, says Nordea.

Economists who monitor monetary policy are more moderate in their forecasts than investors. Many banking economists predict that the ECB will only start lowering interest rates in June.

Shorter market interest rates also rose on Monday. The three-month euribor rose to 3.922 percent and the six-month euribor to 3.905 percent.