Is it a good time to apply for a mortgage? This is how the new reduction in interest rates from the ECB will affect

June, September, and now October. The European Central Bank (ECB) has lowered the interest rate by 25 basis points to 3.25%.

A piece of information to understand why this affects your mortgage: Our mortgages are not directly dependent on the rates set by the ECB. What you need to pay attention to is the movement. If it is down, as it is now, the Euribor usually reproduces that movement and goes down.

Before you continue, what is the Euribor? A concept you need to keep in mind if you want to apply for a mortgage. This is the interest rate that banks use to lend money to each other, and is used to calculate the cost of many variable mortgages.

So is it a good time to apply for a mortgage? It’s better than a year ago because it’s cheaper. But it would be necessary to investigate on a case-by-case basis and seek advice.

And better at a fixed or variable rate?

• Fixed mortgages have become cheaper, so if our bank offers us a competitive fixed rate, it can be a very good option.
• Variable mortgages have increased dramatically in recent years. But if the Euribor continues with the expected evolution, its price could decrease.
• Nevertheless, it is advisable to examine both options and choose the one that best suits our needs.

If you want to know more, you can read here.