Euribor Continues to Rise Ahead of ECB Meeting: Impact on Mortgages and Economy

We started a busy week and as you well know, after the “fun with flags” on Thursday, my boss has been to the parties on Norfolk Island with the yacht, he says that it has been a very long trip (in fact it is the antipodes of the Canary Islands) and that It has given him time to think a lot about the progress of the company, He says that at heart we are a tiny blog and that we should unite with other tiny blogs, what he calls “blogosphere confluences” to summer our forces and show economic information from a transversal, ecofeminist, egalitarian and sustainable point of view, all this with him as the supreme boss, of course. He also told me that he had a terrible jet lag and that he didn’t manage very well, I think it was more like that.

In addition to this, this Thursday we have a good mambo with the ECB meeting where rates are expected to rise by 25 points, so on Friday the Euribor will probably have a very unruly Euribor.

Thank you Scholar, we will try harder, now tell me the value of the Euribor.

After the drop on Friday, we hoped that the Euribor would have calmed down, but it seems that this will not happen this week, especially taking into account Thursday’s appointment. At the moment, the reference index most used in mortgages in Spain eats the drop on Friday and rises 10 thousandths in its daily rate to 3,938%. With only eight days listed, the provisional average for June was 3.909%, slightly above that of May, which finally closed at 3.894%, although significantly above its value six months ago (December closed at +3.018%) and that of a year ago (+0.852% in June 2022).

At its last monetary policy meeting, on May 4, the ECB raised official interest rates again for the seventh consecutive time, but only by 25 basis points, a lower increase than on March 16, February 2 and 15. December, when the rate of increases began to slow down compared to the previous two, of 75 basis points, on October 27 and September 8, respectively.

For practical purposes, this means that for a variable mortgage of €180,000 over 25 years, with a Euribor differential of 1% and an annual review, it will go from paying a fee of €750 to paying €1,039, which means an increase of €289 per month. In the event that the review is semi-annual, the increase will be much lower since in the previous review they did it with a fairly high Euribor, specifically it will rise €87 per month.

At its last monetary policy meeting, on May 4, the ECB raised official interest rates again for the seventh consecutive time, but only by 25 basis points, a lower increase than on March 16, February 2 and 15. December, when the rate of increases began to slow down compared to the previous two, of 75 basis points, on October 27 and September 8, respectively.

On July 21, 2022, the ECB raised all three official interest rates by 50 basis points for the first time in 11 years.

The Euribor rates at three, six and twelve months reached historical lows of -0.605% on December 14, 2021, -0.554% and -0.518% on December 20, 2021, respectively.