If you are buying a property with a housing loan, the price of the property is not the only number you should be watching.
The cost of the money used to buy that property matters just as much.
Six-month EURIBOR, which is commonly used for variable-rate housing loans in Serbia, has risen again. From the end of February it increased from 2.128% to 2.991%, while three-month EURIBOR rose from 2.013% to 2.624%.
For a buyer who is only now building a budget, that does not mean abandoning the idea of a mortgage.
It means doing the calculation more carefully.
What is EURIBOR and why does it affect a housing loan?
EURIBOR is a benchmark interest rate in the European interbank market.
With a variable-rate housing loan, the total interest rate will typically consist of the bank’s margin plus the relevant EURIBOR rate.
That is why a change in EURIBOR can affect the monthly repayment.
If your loan has a fixed rate, the logic is different: the interest rate does not change in the same way during the fixed-rate period.
How much can an interest-rate change affect the monthly payment?
The easiest way to understand it is through a concrete example.
According to Bloomberg Adria’s calculation, a €100,000 loan over 30 years would have a monthly payment of around €537 at a total interest rate of 5%.
If the total rate rose to around 5.6%, the payment would be approximately €571.
That is about €34 more per month, or around €408 more over one year if that payment applied for all 12 months.
With a larger loan, the difference can be more significant.
Important: not everyone’s payment increases immediately
A rise in EURIBOR does not mean that every borrower’s monthly payment changes at the same moment.
With a variable-rate loan, the contract matters: which EURIBOR is used and how often the rate is repriced.
For some loans this happens every three months; for others, every six months.
Serbia also has statutory limits on maximum interest rates. For the period from 1 June to 30 November 2026, the National Bank of Serbia publishes a maximum nominal variable rate of 6.11% for foreign-currency housing loans.
That means a change in EURIBOR does not necessarily translate one-for-one and immediately into every monthly repayment.
What does this mean if you are buying now?
This is where the issue becomes especially relevant.
Suppose you have decided that €700 per month is the maximum repayment you are comfortable with.
If the bank offers you a loan with a €690 monthly payment today, you are technically within budget.
But you have very little room if financing conditions change.
That is why it is better to define not only the maximum property price, but also the maximum monthly payment you could comfortably manage under a less favourable scenario.
Three numbers to know before you start looking for a property
Before seriously searching for a property, know:
• how much of your own money you have for the down payment and transaction costs;
• the monthly payment under the bank’s current conditions;
• the monthly payment if the total interest rate were one percentage point higher.
The third number is particularly useful because it gives you a simple stress test for your budget.
Fixed or variable interest rate?
There is no single answer that is best for every buyer.
A fixed rate gives greater predictability, while a variable rate depends on the benchmark rate and the terms of the contract.
That does not mean one option should automatically be chosen over the other.
Before deciding, ask the bank to show you clearly:
• the nominal and effective interest rate;
• whether the rate is fixed or variable;
• which EURIBOR reference is used;
• when the interest rate is repriced;
• what the monthly payment looks like under several different scenarios.
What does this mean for the property market?
When financing becomes more expensive, buyers who depend on mortgages have less room in their budgets.
Someone who could previously consider a €200,000 property may now need to lower the target price, increase the down payment or choose a longer repayment period.
That matters to sellers as well.
A price that looks reasonable based on online listings is not necessarily a price that enough buyers can currently finance.
That is why access to credit and interest rates affect negotiations, demand and the speed of a sale.
Conclusion
A rise in EURIBOR is not a reason to panic.
But it is a reason not to plan a property purchase only around today’s monthly payment.
A good budget needs some room for change.
Before you seriously start viewing properties, check with the bank or a mortgage adviser how much you may be able to borrow, what the payment looks like under current conditions and what happens if the interest rate is higher.
Only then do you have a realistic property price range to search within.
At Urbani Agent, we can help you find and assess the right property and guide you through the buying process. The specific loan conditions and financial decision should always be checked directly with the bank or a qualified mortgage adviser.
Note: This article is for informational purposes only and does not constitute legal, tax or financial advice. Interest rates, EURIBOR, bank terms and statutory limits can change, so always confirm the current conditions with the bank and relevant institutions.
