The ECB Holds at 2.5%, Lagarde Walks Out Early: What Happens to Your Euro Loan Now
The European Central Bank kept rates on hold, warned that a longer energy shock could push inflation higher and signalled a possible rise in December. On the same day Christine Lagarde said she will leave in February. Here is what that means for Euribor, mortgages and savings.
Коротко
Probably, if your loan has a variable rate tied to Euribor. On 29 October the ECB held its deposit rate at 2.50% but signalled another rise, possibly in December, as the Iran war keeps energy expensive. Euribor has already climbed: the 6-month rate rose from 2.105% in January to 3.043% on 1 October. On a €50,000, 20-year loan at Euribor plus 3%, that adds about €27 a month.
Two pieces of news came out of Frankfurt on Thursday, 29 October, and only one of them was expected. The European Central Bank left its interest rates unchanged. A few hours later Christine Lagarde, its president, announced that she will leave the bank on 7 February 2027, nine months before her term ends.
For anyone with a loan in euros, the first piece of news matters more than the second. But the second explains a lot about the mood in Europe.
What the ECB decided
The deposit rate, the one that steers the market, stays at 2.50%. The main refinancing rate stays at 2.65% and the marginal lending rate at 2.90%, all unchanged since September, according to a summary of the decision. The bank’s message was a warning rather than a promise: “a larger, longer energy shock can push inflation higher and growth lower.”
That shock has a name. The war with Iran and the closure of the Strait of Hormuz have pushed energy prices up across Europe. Eurostat’s flash estimate put euro-area inflation at 3.8% in September, with energy prices up 18.9% on a year earlier and core inflation at 2.5%, as Format Research reported. The ECB’s target is 2%.
According to RTÉ, the bank signalled another rise, possibly in December, and markets expect three more increases by the end of next year, which would take the deposit rate to 3.25%.
Why Lagarde is leaving
Lagarde gave no detailed reason in her video statement. “I leave this institution with a sense of good work done and an ECB that is fit for the future,” she said. In other remarks she said she wanted “the freedom of speech, the freedom of expression” and could not be comfortable with the neutrality her job requires “at the present time”, ABC News reported.
The timing is political. France holds a presidential election in spring 2027, and polls favour Marine Le Pen. Leaving early lets EU leaders choose her successor while Emmanuel Macron is still president. Economist Holger Schmieding said the EU is trying to protect itself “at least somewhat” from that risk, and that the departure “does not change the outlook for ECB policies.” European Council President António Costa said the appointment process starts immediately. Former Dutch central bank governor Klaas Knot and former Spanish governor Pablo Hernández de Cos are seen as frontrunners. Two other board members, Isabel Schnabel and Philip Lane, also leave next year, so Europe may pick a new leadership team in one go.
The number that reaches your bank statement
Most people never pay the ECB rate. They pay Euribor, the rate at which banks lend to each other, plus a margin set in the loan contract. Euribor moves ahead of the ECB because it prices what markets expect the bank to do. This year it has moved a lot.
| Euribor | 2 January 2026 | 1 October 2026 | Change |
|---|---|---|---|
| 3 months | 2.029% | 2.589% | +0.56 points |
| 6 months | 2.105% | 3.043% | +0.94 points |
| 12 months | 2.245% | 3.303% | +1.06 points |
Source: euribor-rates.eu, first working day of each month.
What that means in euros
Take a typical variable-rate loan of €50,000 over 20 years with a margin of 3% over 6-month Euribor. At January’s Euribor the monthly instalment is about €333. At October’s it is about €359, roughly €27 more a month or about €320 a year. On €100,000 the difference is about €53 a month. These are illustrative calculations for a standard annuity loan; your contract’s margin, reset dates and fees decide the real figure.
Fixed-rate borrowers are protected until their fixed period ends. Savers, for once, gain a little: deposit rates usually follow Euribor up, though more slowly than loan rates.
Why this matters in Serbia
Serbia is not in the eurozone, but much of its credit market behaves as if it were. A large share of housing loans is indexed to the euro and to Euribor, so the ECB’s path reaches Serbian borrowers almost directly. The National Bank of Serbia, which sets the reference rate for dinar loans, held it at 5.75% in September, according to Kurir, and keeps the dinar close to the euro at about 117.5 dinars. If Frankfurt raises rates in December, euro-indexed instalments in Belgrade and Niš are likely to follow at their next reset.
There is a second channel. A higher ECB rate tends to support the euro against the dollar, and oil is priced in dollars. Our report on the US elections and the dollar explains why that matters at the pump.
What to watch
The Eurostat flash estimate for October inflation. The ECB’s next meeting in December. The choice of Lagarde’s successor, which EU leaders will decide by qualified majority in the European Council. And the bond market in Paris, where France’s borrowing costs have reached levels not seen since 2002.
Frequently asked questions
Did the ECB raise interest rates in October 2026?
No. On 29 October it held the deposit rate at 2.50%, the main refinancing rate at 2.65% and the marginal lending rate at 2.90%.
Will the ECB raise rates in December?
It signalled a possible rise, and markets expect three increases by the end of 2027, to 3.25%. The decision depends on inflation and the energy shock.
Why did Christine Lagarde resign?
She gave no detailed reason, saying she wanted the freedom to speak on world events. She leaves on 7 February 2027, which lets EU leaders choose a successor before France’s 2027 presidential election.
Who will replace Lagarde?
Klaas Knot and Pablo Hernández de Cos are seen as frontrunners. The European Council appoints the president.
How much will my loan instalment rise?
On a €50,000, 20-year loan at 6-month Euribor plus 3%, the rise in Euribor this year adds about €27 a month. Check your contract for the margin and reset date.
Does the ECB affect loans in Serbia?
Yes, indirectly but strongly, because many Serbian loans are indexed to the euro and Euribor. Dinar loans follow the National Bank of Serbia’s rate.
