The 12-month Euribor, the indicator most used in Spain to calculate variable mortgages, has closed lower again in November. This month, he has registered a 2.506% compared to yesterdaythe lowest since September 2022. In this way, people with mortgages will see a significant reduction in his quota after the fall of the difference.
It’s about the eighth successive decline of the markafter a decrease of 1,516 percentage points compared to November 2023, when it reached an average level of 4.022%. So, register the biggest year-on-year drop in the last fifteen yearssince December 2009.
The Euribor started it move down in April this yearwhen it closed at 3.703%. Then it continued to decline in May (3,680%), June (3,650%), July (3,526%), August (3,166%), September (2,936%) and October (2,691%).
Savings for people with variable mortgages
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The new drop in Euribor will lead to a reduction in variable mortgage rates which will be reviewed each year. For example, in the case of a mortgage of 150,000 eurosfor 25 years, and an interest of 1% on the Euribor, The savings will be around 127 euros per month or 1,528 euros per year. In the case of a mortgage of 300,000 euros with the same conditions, the savings will be close to 255 euros per month or approximately 3,057 euros per year.
In statements to EFE, the Strategy Director of Nextep Finance, Víctor Alvargonzález, clarifies that, although the fall in the Euribor is reduced, the more it falls, the more vitamin for the economy. So go positive that it continues to decrease, which is expected to continueas the indicator reduces rate cut by the European Central Bank (ECB). For this reason, it is expected that the Euribor reaching about 2% in a very short time.
The Mortgage Director of mortgage comparator iAhorro and consultant, Simone Colombelli, also believes that, after the recent drop in Euribor, it is likely the “will not apply the brake” signal.. “The signal has registered daily data which is about 2.3% and we expect it could close the year around that figure, around 2.3 or 2.35%,” he says.
2025: the evolution of the Euribor will depend on the ECB
Looking forward to 2025, he explains that the evolution of the Euribor will depend, to a large extent, on the decisions taken by the ECB in terms of interest rates. If the group maintains the cuts in December and in the first quarter of 2025, “it is possible that it will reach values that are even below 2% by mid-yearby June 2025,” Colombelli predicts.
The spokesperson for Kelisto.es, Estefanía González, says that although the Euribor has continued its downward trend in November, the pace has been lower than last month. For this reason, he believes that the indicator already accepts the rate cut that is expected to be made by the ECB at its next meeting on December 12. “The big unknown, as usual, has to do with the size of the rate cut (0.25 or 0.50 points), a variable that will undoubtedly indicate the direction of the Euribor in the last weeks of the year,” he said.
González remembers that the decision of the ECB, as always, will be closely linked to the inflation in the euro areaits growth and other internal factors, such as the upcoming elections in Germany. Now, he warns that we must not forget “that will happen on the other side of the Atlantic it will be sure tooespecially after Donald Trump’s re-election as president of the United States.”
Tariffs on European products and less taxes on American products: this is how the arrival of Trump will affect the economy
In this sense, remember that your promise to impose taxes of 10% on imports from the European Union, added to the possible assessment of the way to reduce the rates initiated by the Federal Reserve (Fed), “the characteristics which the European institution will take into account.” In this context, Kelisto sees something that is increasingly possible rate cut of 0.25 points by the ECB in December and, if so, they expect Euribor 2024 to close below 2.5%.
2024-11-29 15:21:00
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## Euribor Drip Feeds Hope to Mortgage Holders
**World-today-News Exclusive Interview with Víctor Alvargonzález, Strategy Director, Nextep Finance**
The 12-month euribor, Spain’s benchmark for variable mortgage rates, has dipped again, raising hopes for relief among homeowners.
This month saw the indicator close at 2.506%,its lowest point since September 2022,marking its eighth consecutive decline.
We enlisted the expertise of Víctor Alvargonzález, Strategy Director at Nextep Finance, to dissect this positive trend and its implications for Spanish households.
mr.Alvargonzález,the Euribor’s consistent downward slope is welcome news. what are the driving forces behind this encouraging trend?
**Víctor alvargonzález:**
The primary catalyst is the european Central bank’s (ECB) recent rate cuts. As the ECB eases its monetary policy to stimulate the Eurozone economy, the Euribor, which reflects expectations for short-term interest rates, follows suit.
what tangible benefits can homeowners with variable-rate mortgages expect from this drop?
**Víctor Alvargonzález:**
The impact can be meaningful. As an example, consider a €150,000 mortgage over 25 years with a 1% Euribor margin. This reduction translates to monthly savings of approximately €127, or €1,528 annually.
Double the mortgage amount to €300,000, and the savings climb to €255 per month or around €3,057 per year.
Does this downward trend have staying power? Could we see the Euribor dip even lower?
**Víctor Alvargonzález:**
While the rate of decline is slowing, projections suggest further downward movement. We anticipate the Euribor settling around 2% in the near future as the ECB continues to refine its strategy.
Beyond immediate relief for homeowners, what broader implications does a declining Euribor hold for the Spanish economy?
**Víctor Alvargonzález:**
Lower interest rates generally stimulate economic activity. Businesses benefit from reduced borrowing costs, and consumers gain spending power, potentially fuelling consumption and investment.
However, it’s essential to note that the ECB’s actions are a delicate balancing act. While lower rates can stimulate growth, they can also contribute to inflation if not managed carefully.
thank you for providing your insights, Mr. Alvargonzález. this promising trend in the Euribor certainly offers a glimmer of hope for Spanish mortgage holders and the economy as a whole.
