Wednesday, August 10

The most expensive Euribor of the year still allows mortgages to be lowered

The Euribor, the index to which most mortgages are referenced, will close on the rise in October, for the third consecutive month. Specifically, the indicator will end the month at -0.472 percent, compared to -0.492 percent in September.

Despite this, the Euribor will continue to lower mortgages. A year ago it was at -0.466 percent.

Mortgages who have to review their loan in October will notice a reduction in their installments of between 10 and 30 euros per month.

“In these months, we began to notice that the decreases in quotas are already much smaller because there is not much room for maneuver either, the important thing is that they continue to decline and we have not yet had a month in which this trend has changed,” he points out. Simone Colombelli, mortgage expert at iAhorro.

Specifically, for a mortgage of 150,000 euros at 30 years with a differential of Euribor +0.99, the mortgaged will go from paying 537.59 euros per month to 536.76 euros, which represents a saving of 0.83 euros per month or what is the same, 9.96 euros per year.

The Euribor will remain stable in the remainder of the year

Everything points to the Euribor will remain stable as long as the European Central Bank (ECB) does not carry out changes in its monetary policy.

Precisely at the meeting this Thursday, the president of the organization ruled out advancing the roadmap due to the opinion that inflation is of a transitory nature.

In this sense, the ECB will reduce the volume of purchases from the December meeting and will exhaust the pandemic purchase program (PEPP) in March 2022.

It also made no changes to the rise in interest rates expected for December 2023.

The rise in inflation could impact the Euribor

In recent days there has been talk of a possible increase in the price of the shopping basket due to the rise in energy and raw materials.

“This news also impacts the Euribor, if prices continue to rise, it will be necessary to see what decision the ECB makes regarding its interest rate policy. You can either stick with your plan, or you can turn your strategy around with a rate hike to control inflation. This could cause the Euribor to begin to rise more agilely than it has done so far ”, explains the director of mortgages at iAhorro.

No major movements are expected for the remainder of the year, but it could set the ECB’s agenda for the next few months and therefore that of the main indicator of variable mortgages.

“For this end of the quarter some entities are already betting on the reduction of interest rates that we will know in the coming days. The last quarter of the year is still very important to meet the objectives and banks tend to put all the meat on the grill ”, concludes Simone Colombelli.