This is what will happen to the Euribor (and how it will affect your mortgage)

2023-05-06 10:05:55

the continua interest rate hikes carried out by the European Central Bank (ECB) to control inflation in the eurozone has caused a rise in mortgages, directly attacking the pocket of all citizens, due to the increase in mortgage payments.

Why do mortgages go up? The rise in interest rates has triggered the euribor, the index to which most mortgages in Spain are referenced, mainly the variables. In fact, this index has reached positive levels not seen since 2008. In March, this index stood at 3.647%, above the figure registered in February, of 3.534%.

This is what will happen with the Euribor

According to analysts of HelpMyCash, The forecast is that the Euribor will stagnate or rise moderately during the second quarter of 2023although the scenario is uncertain after the bankruptcy of several American banks and Credit Suisse.

The Euribor can exceed 4% at the end of June.

Despite the uncertain future regarding the trend of the index, since it may or may not rise depending on whether the ECB increases interest rates at the next meetings in May and June, from the price comparator you contemplate three possible scenarios:

First stage

The first scenario they contemplate from Helpmycash is that the Eurozone inflation remains high and the banking situation calms down. In this case, the ECB would follow its forecast of raising rates and the Euribor would end up between 4% and 4.5% at the end of the second quarter.

Second scenario

In the second scenario, they contemplate a high inflation with a worsening global banking situation. In this case, the ECB could stop raising its rates or raise them moderately so as not to create more problems for banks, so the Euribor would be in June between 3.5% and 4%.

Third scenario

Lastly, analysts project a scenario in which inflation in the euro area is low. In this case, the ECB could stop raising its rates and the Euribor would end up stagnating and would be around 3.5% at the end of June.

This will affect your mortgage

The upward trend of the Euribor will mainly affect those who have contracted a variable mortgage. Instead, if you have a fixed mortgagewill be maintained regardless of what happens in the coming months with this mortgage index.

How will it affect? The rise in the Euribor will make it more expensive the installments of your variable mortgage while it continues to trade in positive. However, the positive Euribor will only be applied to you when the interest on your loan is reviewed on the date indicated in your contract.