2024-07-24 10:03:43
The euribor today falls to 3.508%. This occurs days after the meeting held by the European Central Bank (ECB) where interest rates were not altered. The decision was expected, and now the indicator most referenced by variable-rate mortgages in Spain continues its slow but unstoppable decline. Today’s figure remains at yearly lows, which opens the door for borrowers renewing their mortgage this July to enjoy reductions in monthly payments that in some cases can exceed 1,000 euros per year.
The average for the month of July for the euribor stands at 3.555% for now, far from the more than 4% compared to the previous year, which also marks a record gap over 13 years, something that encourages significant reductions in mortgages that are reviewed annually.
The decrease in mortgage payments has been delayed and has not been as abrupt as borrowers who renewed at the beginning of the year would have liked – in March they even paid more – but the trend, according to experts, will continue to be downward.
As expected, the ECB has kept the rates unchanged. We need to pay close attention to the message and read between the lines of what the ECB president, Christine Lagarde, announced after a meeting where the authority maintains interest rates at 4.25% following the cut last June. Experts have already indicated that new rate cuts will not happen until at least after summer.
How much will the mortgage decrease in July?
For now, anything that lowers the euribor, even if slightly compared to the large increases of last year and while waiting for the ECB’s new meeting, is good news for borrowers.
So, how much will the mortgage decrease in July? According to calculations from iAhorro, a person who took out a variable-rate mortgage of 150,000 euros in July 2023 with the euribor at 4.149% and a monthly payment of 796.43 euros at the current review (the euribor is at 3.5%) will see their monthly payment drop by 49 euros, which totals 588 euros per year.
If we take the same example but for a mortgage with an initial amount of 300,000 euros, we see that the discount increases to 98 euros per month, or 1,176 euros per year.
Trends in Mortgage Rates and the Euribor’s Impact
The recent decline of the euríbor to 3.508% has made headlines, especially following the European Central Bank (ECB)‘s decision to maintain interest rates at 4.25%. This development indicates a continued trend of decreasing interest rates, reflecting a significant shift from the highs experienced in previous years.
For mortgage holders, these changes are poised to have a tangible impact. With the average rate for July settling at 3.555%, borrowers renewing their contracts can expect annual savings that could exceed €1,000 depending on their loan size. For example, a homeowner with a €150,000 loan might see their monthly payment drop by €49, translating to savings of €588 over the year.
Future Outlook on Interest Rates
The outlook for the coming months suggests that while the current trend is promising, further reductions will likely be gradual. Experts indicate that any additional decreases in the ECB’s rates may not materialize until after the summer, keeping borrowers in a state of cautious optimism.
Additionally, the variability in monthly payments for different mortgage amounts highlights the need for homeowners to closely monitor euríbor fluctuations. For instance, a €300,000 loan reflects a monthly payment reduction of €98, amounting to €1,176 saved annually, illustrating how significant these changes can be as borrowers navigate their financial planning.
The economic indicators suggest that as the euríbor continues to decline, it may lead to a more favorable environment for those with variable-rate mortgages. Keeping an eye on ECB announcements and market trends will be essential for homeowners looking to capitalize on the improving interest rate landscape.
#baja #abre #puerta #rebajas #euros #cuota