The Euribor has risen one and a half tenths since the beginning of March, an apparently insignificant increase but which, according to the banking entities, implies a change in the trend and an increase in the price of around 10 euros in the next mortgage for the month of April. This financial indicator, which establishes the price at which European entities carry out transactions with each other, is still negative, although its trend is clearly upward. The reason is justified by inflationary tensions and supply problems aggravated by the war in Ukraine. As a consequence, families and companies with debts linked to the Euribor will see their financial expenses become more expensive.
However, from Ibercaja they send a reassuring message: “We start from very low levels: the 12-month Euribor is still negative.” If the current progression continues, CaixaBank experts hope that it will overcome the positive gap, a figure that has not been recorded since the beginning of 2016 and which they point out would happen in October. This escalation would only end if the European Central Bank considers that there is no risk of inflation, or that there is a danger of recession in the Euro Zone.
Consequences. There are more families than companies with debts linked to the Euribor. The current increase, of just over one tenth, translates into an increase of just over 5 euros on average in an upcoming review of a variable-rate mortgage.
However, if the planned escalation continues, in October 2022 the increase would already mean an increase of 25 euros in the client’s monthly fee, which would increase to 34 euros at the end of this year and would be around 90 euros at the end of 2023, where CaixaBank experts estimate that the Euribor would have reached the figure of 0.85%.
Given the change in trend, none of the main financial entities in the country is proposing drastic solutions such as suppressing new mortgage contracts. For its part, the Association of Users of Banks, Savings Banks and Insurance recommends taking a series of measures so that this rise does not catch the consumer off guard: «If you are close to a review of the variable mortgage, hurry up, because the trend is changing too fast and it is possible that we will soon see interest rates that are not favorable for the family economy ». From this association they also remember that a bank “always wants to make money”, so they urge customers to be more cautious and encourage them to read everything that is going to be signed well.
Advice. Carlos Ruiz is the director of Legal Services of the Association of Users of Banks, Savings Banks and Insurance (Adicar) and, given the escalation of the Euribor, he is clear that action must be taken as soon as possible and he recommends that consumers follow some steps so as not to directly suffer the consequences of this change in trend. “Last week I was present at a mortgage review and we saw it clearly: it’s time to renew,” he warns clients who have their upcoming semi-annual or annual review. The trend is upward, “promoted by the economic crisis that we had already been dragging and that has intensified due to the Russian invasion” and it will continue like this. The expert predicts a change in the trend in the mortgage that the bank will now begin to offer, which will become a variable rate. Therefore, he encourages you to carefully study each content of the financial document, ask for copies to have everything at hand and, if necessary, go to the main consumer associations. Ruiz is also clear when it comes to calling the attention of potential financial clients: “Sometimes marriages are not eternal, but, in general, a mortgage does accompany you all your life,” he says.
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