Never before has there been such a large increase in just one year. The euribor It was in December 2021 at -0.5% and now in the same month of 2022 it has closed just above 3%. This means an increase in the interest rate of mortgages referring to this index of 3.5 percentage points. How does this translate into my fee?
In Spain more than seven out of ten loans are linked to the Euribor, usually at 12 months. This means that each monthly update of this indicator is of great importance for consumers in our country. And this December, for those who now have to review their quota, the increase in what they will pay will be very considerable.
Taking into account an average mortgage of 150,000 euros, over 25 years and with an interest rate equal to the Euribor plus a differential of 1%, the transition from one year to the next will put pressure on family finances. In December 2021, the monthly payment of that loan amounted to 531.87 euros; it is 6,382.44 euros per year. On the other hand, the landscape is very different with current data.
Using the same example as an average mortgage, the payment on that loan now becomes 792.58 euros; per year are 9,510.96 euros. In this sense, the monthly rent increases in interim terms by 260.71 euros, while the annual amount of the increase in the cost of the mortgage amounts to 3,128.52 euros.
So, in percentage terms, the share increase is 49% more than it was a year ago. This figure has been increasing over the months and it is expected that in the first months of the year it will still have some work to do because the euribor it will rise even more, according to analysts, in the short term and the comparison with the first three months of 2021 will still be against negative values.
The higher the loan amount, the higher the euro increase that is incurred. Now the example is a 25-year mortgage of 250,000 euros with an interest rate equal to the Euribor plus a differential of 1%. In December 2021, the share of this credit was 886.46 euros, equal to 10,637.52 euros per year. With the Euribor of December 2022, the consequent fee to be paid increases to 1,320.97 euros, equal to 15,851.64 euros. The latter amounts represent an extra 434.51 euros per month, which is equivalent to an extra 5,214.12 euros per year.
default risk
In this scenario, the risk of an increase in mortgage defaults increases. therefore, the Government agreed with the bank on a series of measures to prevent consumers from being forced into delinquency. Among these measures are concessions for the transition from floating rate to fixed rate, extension of the repayment term, lack of capital with temporary reduction of interest…
The financial sector remains calm for the moment, there have been no problems with mortgage payments, but is closely following the evolution of the market due to the further pressure that the rise in the Euribor adds to the financial balance of households, which is added to the energy and inflation crisis.
