What should you know about Euribor rates? Read our experts’ tips
Chief Analyst Jan von Gerich and Jussi Pajala, CEO of Nordea Mortgage Bank, explain how popular reference rates impact your life if you have a home loan.
The Euribor rates (Euro Interbank Offered Rates) are reference rates applied in the money markets in the eurozone. They are determined based on the interest at which large eurozone banks can get financing in the money market in euros without collateral.
Despite being based on the European market, few European countries use them as home loan reference rates as frequently as Finland.
“Eurozone countries have different characteristics in many ways. In Finland, variable rates have historically been popular, but in Germany, for example, borrowers favour fixed rates,” says Chief Analyst Jan von Gerich from Nordea.
Finns have a long history of favouring short and variable rates. The typical reference rate used in home loans is the 12-month Euribor although with rising interest rates, customers have begun to show interest in the 6-month and 3-month Euribor rates as well.
Reference rates are publicly quoted interest rates, and the values of Euribor rates can be checked on the Bank of Finland’s website.