The Euribor, the reference index of most variable mortgages sold in Spain, continues to give headaches to many families. This Wednesday it increases 19 thousandths compared to the percentage it reached this Tuesday.
The index continues to moderate from its highs reached in October when it closed at 4.16%. In November it fell 4,022% and in December 3,679%. Its previous highs date back to October 2008 when it reached 5.248%. The January average closes at 3.609%, that is, the Euribor falls for the third month in a row.
How much is the Euribor going up today?
The Euribor today rises to 3.572% With respect to 3.553% this Tuesday, while the monthly average stands at 3.609%. Last Wednesday it reached its monthly maximum, standing at 3.676%.
If the provisional monthly average for January closes like this would mean a new monthly drop and Those who review semiannually will see their mortgage payment go down. The benchmark index from six months ago closed at 4.149%. Mortgages are always reviewed on a monthly basis and not daily.
The European Central Bank (ECB) decided this Thursday to keep the euro zone’s reference interest rates unchanged for the third time since October. The opposite would have been a surprise: investors and analysts thought so by discounted and they were more aware that the institution could give new clues about the expected start of the down cycle of types. However, its president, Christine Lagarde, has conscientiously avoided shedding too much light on the matter. “All I can say is that the consent around the governing council table this morning was that it was premature to discuss rate cuts,” he said.
The Euribor ended December with its biggest monthly drop since February 2009, standing at 3.679%, from 4.022% the previous month. It was the first time in half a year that it fell below 4%. You can calculate how your mortgage would look here.
What will happen in 2024 with the Euribor
The moderation of inflation in the eurozone takes pressure off the European Central Bank (ECB) to continue raising interest rates this year. The US Federal Reserve has already announced that it will lower the cost of money three times this year and, therefore, is pushing the ECB to follow the same path. The market estimates that the body chaired by Frenchwoman Christine Lagarde could leave rates at their current levels until the summer and reduce them thereafter, as long as inflation continues to fall and economic growth slows down.
The inflation rate The annual rate rose five tenths in December in the eurozone, up to 2.9%, according to a preliminary estimate published this Friday by the community statistical office Eurostat.
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Regarding people with an annual review, they will begin to see their fees drop when the average monthly rate is below what it was a year ago. According to Foundation of Savings Banks (Funcas)they will not notice it, at least, until April 2024.
How the Euribor works and its impact on mortgages
Among other uses, the Euribor is used as a reference index by many banks to set the interest on variable rate mortgages in Europe, something that happens to a greater extent in Spain. That is, the interest on the loans fluctuates depending on the variations in this value: If the Euribor rises, the mortgage becomes more expensive; If it goes down, the mortgage becomes cheaper. The rise in the Euribor responds to greater tension in the financial market. Its increase means that banks are charging higher interest to other financial entities for lending them money, and at the same time, they are increasing the interest they charge their clients for mortgage loans.
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2024-01-31 19:26:31
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