The widespread use of loan contracts with floating interest rates means that the European Central Bank loosening its monetary policy has reduced the interest rates in Estonia on both new loans and those taken out earlier. Financial market participants expect that monetary policy will be eased further during 2025 and that Euribor will be around 2-2.5% in the years ahead. The effect of interest rate cuts will reach borrowers in Estonia and offset the earlier rises in rates faster than in most other countries, where loan contracts with long-term fixed interest rates are more common.
