he is euriborthe reference index for most Variable mortgages sold in Spain, continues to cause headaches for many families. This Thursday, August 8, The index rises slightly again, reaching 3.202% (+0.010), moving away from the historical levels it had achieved in 16 months, with 3.138%, where mortgage holders who review their credit with the figure of the month will notice who passed a reduction in their monthly payment. around 50 euros per month or 600 euros per year. The average for August, for now, is 3.240%, and the expected one is 3.212%.
On March 5, it reached its annual high of 3.751%, but since then it has been fluctuating. Reference index of mortgage It has been falling since March when the month ended at 3.718%, in April it ended at 3.703%, in May at 3.680%, in June at 3.650%, and in July 3.536%.
This reference determines the cost of mortgage loans fell by more than one tenth in July (-0.124) to 3.526%. This figure represents the biggest mortgage relief since 2013 and puts the percentage at levels not seen since January 2023, 18-month lows.
Since April, the Spanish mortgage Those who reviewed their share already pay less on their mortgage credit since last year in those months the Euribor was higher. For example, the Euribor ended at 3.65% in June and last year in this same month the rate was 4.007%.
Inflation rates
The inflation rate in the euro zone stood at 2.6% in July year on year, a tenth above the price increase seen in June, according to a provisional estimate of the data published by the community statistics office, Eurostat.
The slight acceleration in price increases in the euro area reflects the 1.3% rise in the cost of energy, following a 0.2% year-on-year rise in June, while fresh food rose 1% year-on-year year, three tenths less than the previous month.
To see a fall in interest rates and, therefore, a reduction in Euribor and variable mortgages, it is very important that European Central Bank (ECB) see inflation under control and close to keeping its mandate at 2% in the medium term.
What will happen in 2024 with the Euribor
Inflation moderation is an incentive for the European Central Bank (ECB) to stay on track rate cut policy began on June 6. At last month’s meeting, the monetary group reduced the price of money by 25 basis points, so that the reference rate for its refinancing operations fell to 4.25% from the previous 4.5%. The monetary body fulfilled the script and reduced interest rates for the first time since 2019. This Thursday, The ECB will meet again although it is not expected to cut rates.
The institute cut issuance rates after leaving them unchanged for four consecutive meetings. The ECB stepped on the brakes at its meeting in October 2023 after making ten consecutive increases in the price of money that took it to its highest level in more than 20 years.
The president of the Bank of the Netherlands and a member of the Governing Council of the ECB, Klaas Knot, confirmed this Monday that he is satisfied with the market’s predictions which include one or two cuts in interest rates. for this year.
How the Euribor works and its effect on mortgages
Related news
Among other uses, the Euribor is used as a reference table by many banks to set the interest on variable rate mortgages in Europe, which happens to a greater extent in Spain. That is, the interest on the loans varies according to the fluctuations in this value: If the Euribor rises, the mortgage will be more expensive; If it goes down, the mortgage will be cheaper.
The increase in the Euribor corresponds to more tension in the financial market. Its increase means that banks are charging higher interest to other financial institutions to lend them money, and at the same time, they are increasing the interest they charge on their customers for mortgage loans.
2024-08-08 10:07:47
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