Euribor has turned upward — what it does to a buyer's budget

The 12-month Euribor has risen from around 2.2% in spring to nearly 3.0% by August, and the six-month rate to 2.7%. The turning point came in June, when the European Central Bank made its first hike in three years, taking the deposit facility rate to 2.25%, and then held it in July. Seventy-five basis points in a year means roughly €80–90 more per month on a €200,000 loan over 25 years, which trims a buyer's budget by about one price bracket. The market data has not caught up yet: Tallinn apartment transactions in July were only 4% below a year earlier and the average resale price 4% higher. Buyer behaviour usually shifts three to six months after a rate move, so Q3 data will be this cycle's first real test. The rental market softens the blow — asking rents are up a couple of percent year on year and have lagged wage growth, so the gap between renting and buying has not moved sharply. For a valuation model the point is that rate changes reach prices with a lag and unevenly across segments — which is why we publish the error by segment rather than as one headline number.