2023-05-02 07:53:10
He euribor continues to give a bad life to Spaniards who have a variable mortgage. The indicator to which the bulk of variable housing loans are referenced will once again close April with increases. On Friday, the last trading day of the month, it climbed to 3.88% in the daily rate –from the monthly average to 3.757%above the 3.647% in March, which represents an increase of 110 basis points. With this level, a person who has contracted a 30-year variable mortgage of 150,000 euros and with a differential of 0.99% plus Euribor will suffer an increase in their mortgage payment of around 300 euros per month. In absolute terms, will go from paying about 483 euros to about 781 per monthwhich is equivalent to a additional annual outlay of around 3,570 euros. With the same conditions, a mortgage of 300,000 euros of capital pending amortization and 30 years ahead of payment would have to assume a monthly increase of 596 euros, which means around 7,158 additional euros per year.
In May, things are not expected to improve for those with mortgages. Quite the contrary, analysts take it almost for granted that the Euribor will exceed the quota of 4% that it seemed destined to overcome last month and that only the financial crisis caused by the falls of Silicon Valley Bank (SVB) and Credit Suisse stopped it. But now that, although the shocks have returned with the difficulties of the First Republic Bank, it seems that the option of a great financial debacle seems ruled out, the presumable thing is that the European Central Bank (ECB) continues raising interest rates to curb inflation once cleared the way that a crisis could slow down growth and make it work with prices. He XTB analyst, Joaquín Robles, expects the Euribor to continue rising over the coming months, albeit at a “slower” pace. Robles assures that he will continue to be conditioned by the movements made by the ECB, which will hold its next meeting on May 4 with the almost certain option that it will raise rates again. “For the next three ECB meetings, an increase of 1% is expected, which could be distributed in 50 basis points in May and 25 basis points in June and July. Although these decisions will continue to be conditioned by the next inflation data, it is expected that interest rates can reach 4.50% in mid-summer.In this environment, We expect the Euribor to exceed 4% during the month of May“explains this analyst.
He investment director at ATLCapital, Ignacio Cantos, also takes more rate hikes for granted. In statements to Efe, Cantos is considering a rise in the price of money of 50 basis points at the next ECB meeting on May 4. The monetary entity itself has already opened the door to a new rise. Last week, after learning that subjacent inflation in the euro area had reached a maximum of 5.7%, the ECB’s chief economist, Philip Lane, already warned. “If the baseline scenario underlying the March ECB staff macroeconomic projections persists, it will be more appropriate to raise rates further,” he said.
Simone Colombelli, director of mortgages at iAhorroforesees a period of stabilization of the Euribor, which could “be close”, although he also believes that it will reach 4% before, “a value that we could already see in the daily data for May or in the average for June”forecast.
Less blunt are from HelpMyCash. The co-founder of this financial comparator Olivia Feldman assures that contrary to what happened in 2022, this year “it is difficult” to forecast how much interest rates can rise, at what speed they will do it and how far they will go. “Last year, the ECB was clear that to stop inflation it had to have a bullish policy. Now, although your target is the same, rates are already at high levels, so you have to tread carefully to avoid wreaking major havoc on the economy,” she warns.
The Association of Financial Users (Asufin) considers that it will not be in May when the Euribor touches 4%. This organization ensures that the uncertainty generated by the “digestion of the rapid rise in rates” by certain entities in the United States has led to a moderation of the indicator and, for the moment, the “top” of 4% has not been reached. . “We expect to reach it around the month of June, to continue at those levels until the last quarter of the year, in which we could already see the drop in the index,” says the association.
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