The six-month Euribor had remained below zero percent since the end of 2015, clocking at -0.041 percent on January 4, 2016. It reached just above zero percent in early June, however, and has been climbing steadily since.

By August 1, the six-month Euribor stood at 0.654 percent, and as of Monday, August 29 it had reached 1.077 percent.

Interest rates on the majority of home loans issued in Estonia are tied to the Euribor, and are typically updated twice a year. During the years the six-month Euribor was in the negative, it was equated to zero for interest rate calculation purposes.

The Euribor reached a record high of 5.4 percent in fall 2008.

Swedbank noted that, for example, in the case of a €50,000 home loan, a 1 percent increase in the six-month Euribor will mean a €25 increase in the monthly loan payment.

Euribor rates are based on the interest rates at which a panel of European banks borrow funds from one another, according to the Euribor homepage. While it is being phased out as a benchmark, the London Inter-Bank Offered Rate (Libor) is a similar rate monitored as a key base rate in countries outside the Eurozone, including the U.S. and U.K.

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