The reference index for mortgage loans closed the month of February above 3.5%
The 12-month Eurborthe index to which most variable mortgages in Spain are referenced, has continued its upward trend during February and, with two days to go until the end of the month, it has stood at the 3,514%according to data collected by Europa Press.
If this figure is confirmed, the index will be at its highest level since November 2008, when it registered a monthly rate of 4.350% in a context of global financial crisis derived from a housing bubble that caused housing prices to fall. In fact, the following month, the Eurbor stood at 3.452%, almost one percentage point less.
Compared to January, when the Eurbor closed at 3.337%, the rise will be 0.177 percentage points and 3.849 points compared to the data for February 2022, when the indicator was at -0.335%.
With the average registered so far of 3.514%, a person who has contracted a 30-year variable mortgage of 150,000 euros and with a differential of 0.99% plus Eurbor will suffer an increase in their mortgage payment of around 300 euros. In absolute terms, it will go from paying about 450 euros to about 759 per month, which is equivalent to an additional annual outlay of more than 3,600 euros.
With the same conditions, a mortgage of 300,000 euros of capital pending amortization and 30 years pending payment would have to assume a monthly increase of 600 euroswhich means around 7,200 additional euros per year.
The XTB analyst, Joaqun Robles, points out that this index continues to be “very conditioned” by the prospects of further rate hikes by the European Central Bank (ECB). “The market is discounting another increase of 50 basis points for the next ECB meeting,” which will be held on March 16, and is preparing “for a new rise of at least 25 basis points in the month of May.”
Despite the fact that inflation in the euro area has shown signs of moderation in the last three months, reaching 8.6%, this level is still well above the 2% target set by the ECB. “In recent weeks, the upturns in consumption and activity in services have raised fears that inflationary pressures will continue, which could lead the ECB to extend the cycle of increases for longer than expected“, Explain.
The hope of the central banks -not only the ECB- in recent months was that the rate hikes would serve to curb demand, in such a way that prices would gradually stabilize. However, the economy is showing greater strength than expected, which may serve to avoid a “deep recession”, but “prolong the fight against inflation”explains the expert.
In this way, XTB considers it “difficult” to predict a ceiling for interest rates in the euro area, although it does not rule out that they reach 4% in the month of June, which still gives the Eurbor margin to continue its upward trend.
CHANGE TO FIXED OR MIXED MORTGAGE
On the impact of this rise in Eurbor on the mortgage market, Rastreator’s head of mortgages, Sergio Carbajal, points out that it has led to “great interest” on the part of debtors to change their variable-rate mortgage loan to a variable-rate one. fixed or mixed
Specifically, the comparator points out that in the last month 31% of production has been mortgage changes, which means an increase of 342% compared to last year, although it is expected that this rise will moderate over the next few months, especially from September, since it will be a year of the “unstoppable climb” of the indicator.
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