The Euribor fell again and will allow savings on the mortgage of up to 1,200 euros per year

he is euribor continues to delight variable rate mortgage holders. The indicator ends in July at 3.53%, lower than the figure for June (3.65%) and that for the same month of 2023 (4.149%). This translates into reductions in the mortgage payment, approx 60 euros per month, about 750 euros per year for those who need to review their mortgage with the closing of the July index, although the annual savings could reach 1,200 euros, a little more than 100 euros per month.

he is euribor has registered during the month of July the lowest daily data of the year, even reaching values ​​that were lower than 3.5%. For example, on Thursday the 24th it recorded a daily figure of 3.481% and on Friday the 26th it was at 3.426%, also the lowest since February 2023. levels that have continued to decline this week, reaching around 3.4%. This has led to the monthly average recording its biggest year-on-year fall in 11 years, since June 2013.

“After a bullish period like the one we saw last year, the offspring What we see in Euribor is logicalespecially since we are in the mortgage market at a time where we see a certain hope that the The European Central Bank (ECB) continues to lower rates interest when you return holiday, at their September meeting,” analyzes Simone Colombelli, director of Mortgage at mortgage comparator and adviser iAhorro.

However, Colombelli is also cautious and explains that “we are still in a stabilization process and we will start to see the real change when the index starts to register lower data than two years ago, around 2%. “2023 is not a year we can take for granted.

Variable mortgages are cheaper up to €1,200/year

The new fall in the Euribor will translate into a reduction in the allocations of those with variable rate mortgages. According to iAhorro’s calculations, mortgage will go down between 53 and 107 euros per month, between 640 and 1,200 euros per year, in case they have to do their annual review this month and between 3 and 6 euros per month if they have to do the half-yearly review.

For example, someone who has taken out a mortgage type of interest variable 150,000 euroswith an annual review, a term of 30 years and a spread of 0.99%, you can see how will go from paying 818.02 euros to paying a fee of 764.34 euros to the month. This represents a reduction of 53.68 euros per month or, in other words, 644.21 euros per year. Likewise, if the first amount of this mortgage for 300,000 euroswith the same conditions mentioned above, we can see that this fee will fall by more than 100 euros per month: of bought for 1.636,05 Euro that would pay until now bought for 1.528,68 Euro I would start with this month’s review. In this way, the annual reduction comes to 1,288.41 euros.

For his part, if the mortgagee had chosen review your tax every six months Instead of annual, it should be taken into account the data recorded by the Euribor in January 2024, when it stood at 3.609%. Therefore, in the current review the reduction will be very small, since the indicator is now only 0.079 percentage points lower than the number from six months ago.

Therefore, if you have contracted a mortgage with a variable interest rate of 150,000 eurosalso a term of 30 years and a difference of 0.99% to which Euribor data had to be added to calculate its interest rate, we see, despite the fact that it also started paying 818.02 euros per month, with the review of January that fee was reduced to 768.88 euros and now it will go down again, but only three euros per month: to 765.88 euros. This is the opinion of a semi-annual discount of 17.98 euros. Likewise, in a mortgage of 300,000 euros with the same characteristics, the reduction would not be very high either: if you pay a portion of 1,537.75 euros starting in January, you will pay one of 1,531.76 euros from now on . Therefore, the reduction will be 5.99 euros per month or 35.96 euros per semester.

All to come from the ECB

At its meeting on July 18The ECB confirmed its decision to keep interest rates at 4.25%, but left the door open to a fall in September In the opinion of Ricardo Gulias, CEO of RN Tu Solution Hipotecaria, after seeing how the Euribor been days celebrating your annual minimum value, we can expect a new “big fall” despite the ECB announcement. “We hope that the current trend of Euribor continues to decrease in 2024“This reduction in the reference table is essential for mortgage holders to experience these significant savings in their finances and see relief in their payments,” said the expert.

For Luis Javaloyes, CEO of Agencia Negociadora, “the euribor has consolidated a downward path, standing well below 3.5% at the end of July. This evolution suggests that The market is expecting interest rate cuts in the futurein a context where inflation appears to be more under control and the euro zone economies are showing signs of uneven weakness.”

“The reduction of inflation has given the ECB room to consider an easier monetary policy, which could soon change to interest rate cuts. This expectation of a reduction in interest rates is reflected in the drop in Euribor, as this index is usually adjusted according to market expectations regarding the decisions of the ECB,” said Javaloyes, which assures mortgage holders, “This fall in Euribor is good news. It is estimated that, according to the current levels of the indicator, mortgage payments average that could be reduced by approximately 600 euros per year. “This will bring significant financial relief to many families who are seeing their monthly payments reduced at a time when the prices of goods and services have been under pressure.”

September, the main month for the mortgage market

July and August are usually quiet months for the mortgage market, as citizens go on holiday, banks and notaries are at the lowest levels and, therefore, important decisions, such as buying and selling home, left for ‘back to school’ in September. In fact, in September it will be in detail the next meeting of the ECB.

“We all hope for that at that meeting the ECB lowers interest rates again, albeit by another 0.25 percentage points. This will stimulate the market a little more and, obviously, it will affect the values ​​recorded by the Euribor; It gives him more wings so he can continue down the path in a more visible way,” says Colombelli. “So, interest rates Officers would be 4%. In addition, there could be a new decline before the end of the year, to put them around 3.75%,” he said.

How will this affect the Euribor? Colombelli does not want to make predictions about what will happen between now and the end of the year because “The Euribor destroys all the analysis we have been doing. We see that, month after month, it has been changing more than expected because many factors affect it and this makes it impossible to predict how it will be the few months. The only thing we can say, apparently, is if it lowers rates the ECB again, the Euribor will also fall.”

No changes, in August, in the mortgage offer

As for the steps the bank will take, for now, in August, There is no expectation that there will be any changes in the offers. “There are some entities that have lowered rates, but to adjust them to the market and not be left out mortgage war that we are seeing now, but until mid-September, when everything will return to a little normal, we do not expect big movements from the banks in this sense,” says Colombelli , which expects “the last quarter of the year is always where we see more trends.

So, between mid-September and early October, if all goes as planned, The banks will make a move and lower their interest rates to follow the line of the ECB, but also to achieve its annual business objectives, according to this expert.

What is certain is that the downward trend is clear, both in the Euribor and in interest rates, and banks are adapting well to this new situation. “At iAhorro we have already seen it fixed mortgages that are close to 2% TIN for the best profiles and mortgages that are around 2.5% TIN for more typical profiles. This is good news because when banks reduce the interest rates on their mortgages, what they do is stimulate the mortgage market more,” concluded the iAhorro spokesperson .