The drop in the 12-month Euribor to 4.02% this November will not be enough to reduce the price of mortgages and counteract the multiple increases that have occurred since last February. This date is relevant since many of the variable rate mortgages that will be reviewed in the coming weeks will do so from a six-month perspective, coinciding with the months of February and March when the index was between 3.5% and 3.7%. The rest of the mortgage variables that will be reviewed in one year will have a Euribor of 2.828% as a reference.
This Euribor level implies, according to Europa Press calculations, that a person who has contracted a variable mortgage of 150,000 euros with a residual maturity period of 30 years and a differential of 0.99% plus Euribor, and must review their interest rate interest in the month of November, you will register an increase in your mortgage payment of about 100 euros per month.
The operation implies the maximum increase for a person who has contracted a mortgage with that financed level, since since it is a review at the beginning of the loan (that is, there are 30 years left to amortize), the change in the interest rate has much more impact as there is a lot of principal to amortize.
Second drop in two years
This drop is the second that the Euribor has experienced in December 2021, when it was in negative numbers, -0.502%. The other drop was recorded last August when it stood at 4.073%, compared to 4.149% in July, coinciding with the summer break. Furthermore, in daily rate, the Euribor stood at 3.983% this Wednesday, its lowest level since June 15, when it registered a value of 3.965%.
HelpMyCash specialist, Miquel Riera, believes that this index could “tend downwards” in the coming months, although it will depend, to a large extent, on the evolution of inflation in the eurozone. “If this continues to moderate in the coming months and approaches the 2% target, the European Central Bank (ECB) will not need to raise its interest rates, now at 4.5%. It is even possible that it will reduce them at some point next year, especially if the community economy shows signs of recession,” he points out. In this way, he believes that the Euribor will end 2023 at around 4% and that it will move between 3.75% and 4% throughout the first half of 2024. “It is also not ruled out that it will fall to 3. 5% in the most optimistic scenario,” he explains.
On the other hand, iAhorro’s mortgage director, Simone Colombelli, prefers to be cautious: “This trend is striking, but we should not get carried away. It is good news, of course, especially for those with mortgages, but it is still too early to tell.” “that the Euribor is not going to rise again. In fact, it is likely that it will and that what we will see in the coming months are variations, both upwards and downwards, and that it will remain close to 4% for some time.” .
Likewise, Colombelli adds that “with the return of summer the trend has changed and we are returning, little by little, to a certain level of stabilization of the Euribor. This is demonstrated by the data: the inter-monthly variations are around one tenth.” This has happened, in part, to the stabilization that the ECB has also done in official interest rates.
THE NAIS IS OFFICIAL EDITOR ON NAIS NEWS