2023-06-16 12:15:53
The new rise in interest rates of 25 basis points announced by the European Central Bank (ECB) has given a new boost to the Euribor, whose daily rate flies above 4%.
Just one day after the highest monetary and financial authority in the euro area confirmed a new increase in official interest rates, the eighth consecutive, The Euribor has reached 4.020%, the highest since November 25, 2008, when it was at 4.051%. Thus, the reference indicator for most variable mortgages in Spain has risen to the level that the price of money will reach on June 21, the date on which the ECB decision will materialize.
After this new rise in the daily rate, the monthly average for June already reaches 3.928%0.066 percentage points more than in May, when it closed at 3.862%, which anticipates a new rise in variable mortgages that are due for review.
In fact, experts believe that it could rise more in the coming months, boosted by the new restrictive measures in monetary matters that the ECB will have to take to finish taming inflation, and they do not rule out that in June it will already exceed 4% in rate monthly.
The market expects at least another additional rise in interest rates at the July meeting, also of 25 basis points, and does not rule out another one in September, especially after the institution led by Christine Lagarde has revised its forecasts upwards. of inflation until 2025. In this scenario, experts believe that The Euribor could remain stable at current levels, even higher, in the coming months.
The Savings Banks Foundation (Funcas), without going any further, places the annual average for 2023 at 4.25% and 4% in 2024. Meanwhile, BBVA Research does not rule out even reaching 4.5% .
According to Juan Villén, CEO of idealista/mortgages, “speculating about the future of the Euribor and its ceiling is risky, since everything will depend on the evolution of inflation and the possible impact of rate hikes on economic growth and employment.” However, he confesses that “we must not forget that historically inflation is difficult to break, and that we have seen rates higher than the current ones.”
More early repayments and mortgage changes
Villén remembers that many households with savings are paying off their variable mortgages early to reduce the payment of interest and the monthly payment, thus compensating for the blow of the Euribor, and he believes that this trend will continue. the same opinion Raymond Torres, director of the situation of Funcas, who explains that “deleveraging has not ended. It remains to be done.”
What the market also predicts is that those mortgaged with a variable loan, and who do not have savings, will continue to choose to renegotiate the conditions, either with their bank or with another, seeking to protect themselves from the Euribor under the umbrella of the fixed rate.
Thus, Juan Villén insists, “we will continue to see many mortgage changes from variable to fixed or mixed, renegotiating with your own bank (novations) or changing entities (subrogations) looking for a lower and safer rate”.
As the general director of idealista/mortgages defends, it is still a good time to change a variable mortgage for a fixed or mixed one, since there are offers with fixed rates close to 3% and mixed ones with rates close to 2% or even below in the initial fixed leg. The key, in his opinion, is to negotiate with the banks in search of personalized offers and compare them. That is, go beyond the initial advertising.
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