There is no consolation for people mortgaged with a variable interest rate loan. After the moderation experienced last week, The Euribor has strongly resumed the upward path and has already chained four consecutive days with strong increases just after the Easter holidays.
Specifically, the indicator to which most variable rate mortgages in Spain are referenced rose 40 thousandths on Tuesday, 72 thousandths on Wednesday, 64 thousandths on Thursday and another five thousandths on Friday.
Thus, The Euribor has closed the week at 3.723 percent in daily reference.
The Euribor anticipates that the ECB will continue to raise rates
That being the case, it seems that the Euribor is wanting to indicate that the European Central Bank will continue with the rises in interest rates to try to rein in inflation, even at the risk of damaging the banking sector and the economy as a whole.
“It must be taken into account that the rise in interest rates means that having money sitting in the bank has a higher opportunity cost. Hence, many depositors choose to withdraw the money and invest it (for example, in Treasury Bills)”, explains Carlos Santiso, professor of the Master in Stock Market and Financial Markets at the IEB.
“In this way, they deprive banks of financing or increase their cost, since banks are forced to remunerate deposits at attractive rates,” adds this expert.
The Euribor touched 4% in the intraday rate in March
Even so, the Euribor is far from the intraday highs of the month of March, when it reached 3.978 percent, practically touching levels of 4 percent.
Likewise, averaging with the falls at the beginning of April, the monthly average of the Euribor (the one that counts to review the mortgage payment) is lower than that of March.
Specifically, the provisional average stands at 3.636 percent, below the 3.647 average at which it closed last March.
The Euribor will continue to make mortgages more expensive in April
In any case, since the review of the mortgage payment is carried out with respect to the level that the Euribor had the previous year (or six months ago, in some cases), everything seems to indicate that mortgages will continue to become more expensive in April.
Because six and twelve months ago, the Euribor was considerably below. Specifically, the indicator stood at 0.013 percent in April 2022, while it closed October of the same year at 2.629 percent.
Thus, if the Euribor closes at the current average, a variable mortgage of 180,000 euros at 25 years with a differential of Euribor plus 1 percent would become more expensive by about 335 euros per month if the review is annual.
If it is biannual, the increase would be much lower, around 100 euros per month.
