Majority of mortgage loans in Lithuania include changing rate of the Euribor interbank lending rate. The Bank of Lithuania has warned that after a period of a negative rate the rate is expected to rise, Lithuanian public broadcaster LRT and Jonas Deveikis report.
Lithuania’s central bank noted that Euribor is expected to rise to one percent this year and to two percent in 2023. It will be felt by a large part of residents of the Baltic country, who have a mortgage at a bank, as 98 percent of them have their interest rates recalculated every three, six, or 12 months, according to the Bank.
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Those who have a loan with a 12-month Euribor rate are already paying more after the interest recalculation.
In mid-May, the 12-month Euribor was 0.31 percent. This means that Euribor has to be added to the bank’s margin when the loan is recalculated. If a person has a loan of 100,000 euros for 30 years at a 2 percent interest rate, they have been paying 369 euros per month to the bank so far. With a 0.31 percent increase in Euribor, the monthly payment has increased by around 16 euros and will now stand at 385 euros, LRT reports.
Lithuanians warned of rising Euribor bank lending rate
