Rising interest rates in the eurozone have raised questions about what lies ahead for Serbian citizens repaying mortgage and cash loans linked to the euro. While the European Central Bank (ECB) is closely monitoring inflation and signalling caution in the period ahead, the National Bank of Serbia (NBS) has, for now, kept its key policy rate unchanged at 5.75%.
The National Bank of Serbia explained whether borrowers should expect higher monthly repayments, how potential interest-rate changes could affect loans, and when a shift in monetary policy might occur.
How will the ECB’s rate increase affect loans in Serbia?
Responding to questions about the impact of the ECB’s latest increase in its three key interest rates on loan repayments in Serbia, the NBS stated:
The ECB decided at its June meeting to raise its key interest rates by 25 basis points amid stronger inflationary pressures caused by the energy shock resulting from the conflict in the Middle East.
“ECB officials continue to stress that future decisions will depend on incoming data and that, in the current environment of heightened geopolitical uncertainty, it is difficult to assess how long the energy shock will last and what its effects on inflation and economic activity will be. At this stage, they cannot say what the next monetary policy move will be. An increase in the ECB’s key interest rates may affect the movement of EURIBOR, and changes in EURIBOR influence interest rates on euro-indexed loans in Serbia in the same direction, particularly in the case of loans with variable interest rates directly linked to EURIBOR, most commonly the three-month or six-month rate,” the NBS said.
Consequently, any increase in EURIBOR could lead to higher interest rates and larger monthly repayments for borrowers with variable-rate loans tied to EURIBOR. “However, the transmission of EURIBOR changes to interest rates in Serbia is neither necessarily immediate nor complete. It depends on the terms of individual loan agreements, the type of reference rate used, and the frequency of rate adjustments. Furthermore, it is important to emphasise that, in the event of a significant rise in EURIBOR, individual borrowers in Serbia are protected by systemic safeguards incorporated into the Law on the Protection of Financial Services Consumers, which limit the possibility of sudden increases in interest rates,” the central bank explained.
What will happen to dinar-denominated loans?
The NBS says it is maintaining its current course. It expects inflation to rise temporarily due to higher oil prices but does not want to commit in advance to either increasing or cutting interest rates until it becomes clearer how long the Middle East energy shock will last.
“Based on the current medium-term projection from May, which assumes that the energy shock will weaken in the coming period and that global energy prices will decline, the National Bank of Serbia expects inflation to only temporarily exceed the upper limit of the target range towards the end of this year and the beginning of next year. This will be due to higher global oil and commodity prices, as well as a low comparison base from September last year, when wholesale and retail trade margins were capped at 20% under a government regulation.”
The central bank expects this increase to be temporary and believes inflation will return to the target corridor by the middle of next year.
How much could euro mortgage repayments actually rise?
What borrowers want to know most is the specific impact on their monthly mortgage payments following the ECB’s latest rate increase.
“The size of any change in monthly repayments depends on several factors, including the remaining loan balance, repayment period, the bank’s agreed margin, and the type of EURIBOR applied (three-month or six-month). Therefore, it is not possible to provide a single estimate that would apply to all borrowers. Generally speaking, the ECB’s 25-basis-point increase could, through a rise in EURIBOR, lead to a modest increase in monthly repayments for borrowers with variable-rate loans linked to EURIBOR. However, the actual effect depends on the extent to which, and the speed at which, the changes are reflected in EURIBOR, as well as the date of the next interest-rate adjustment specified in the individual loan agreement. It is important to underline that borrowers in Serbia are additionally protected by legal mechanisms that limit the possibility of sudden interest-rate increases, thereby mitigating the effects of any changes in international financial markets,” the NBS concluded.
(Blic, 19.06.2026)
https://www.blic.rs/biznis/nbs-za-blic-biznis-sta-ce-biti-sa-ratama-kredita-u-evrima/pk310z6