People with a mortgage will save up to 190 euros a month after the fall in interest rates: what will happen at the end of the year

Following yesterday’s announcement of the European Central Bank’s (ECB) decision to reduce interest ratesgo a variable rate mortgage is lucky, because you see how you are monthly installments will be between 80 and 190 euros per month, that is, between 970 and 2,300 euros per year.

This can be seen in the report “The impact of lower rates on the housing market” made by the real estate portal Fotocasa, which estimates that the reduction in mortgages will be around 10% year on year.

According to the report, they will variable rate mortgage those who will see this effect immediately, as most have the Euribor as their benchmark.

The Euribor had already anticipated the ECB’s interest rate cuts

Despite yesterday’s drop in interest rates, the Euribor is ahead with downward trend, arriving for the first time this Monday, value below 3%which has not happened since December 2022.

In fact, the indicator closed the month of August with a value of 3.166%, going down from the 3.526% it indicated in July, and the fall has been the largest in 15 years.

If the index has been showing a decline in recent dates, the ECB interest rate cut will not increase it, according to the forecasts of the experts, who They estimate that the year could end around 2.5%.

How mortgages would be at the end of the year according to forecasts

With these predictions that the Euribor will close this year at 2.5%, mortgages will see their payments reduced, allowing families to improve their savings and dedicate these amounts to cover other expenses.

According to Fotocasa’s calculations, these were the changes in mortgage payments comparing the data for December 2023, with the expected forecasts for December 2024:

The drop in interest rates will mean the beginning of a ‘mortgage war’

The forecasts indicate that there will be a new drop in interest rates in December, which It is expected to be 3.75% or 3.5%, despite the fact that the Governing Council of the ECB maintains that they do not have a roadmap for reducing them, and that they will only do so if the data is favorable.

Despite this, if the experts’ predictions are taken into account, Fotocasa says that this will create a the most attractive situation for mortgages, and for those who think buy a home.

This increase in mortgage applications will mean a “new mortgage fight between banking groups to attract customers”, lor that will force banks to try to offer better conditions than their competitors.