Variable mortgages will rise by 41 euros per month in Galicia despite the sharp drop in the Euribor

2023-12-30 08:24:35

Not even the most optimistic people anticipated it. In December, the decline in the Euribor, the main reference for variable interest mortgages, was consolidated, with an average of 3.679%, to the level of last April. In the last day of the month and of the year, this indicator to which banks lend money to each other has stood at 3.51%, after registering the largest drop from one month to the next in 14 years.

Since last November 29, the Euribor has hardly stopped falling as the markets sensed that the period of interest rate increases by the European Central Bank (ECB) to stop inflation could have come to an end. or be close to it. The average at the end of the month is clearly below that of November, which was 4.022%. The current level is still higher than a year ago, since in December 2022 the Euribor was at 3.018%. Hence, those who review their mortgage annually will have to pay more in fees, although the increases are increasingly gentler. Only when the average monthly rate is below what it was a year ago will the bill begin to decrease. Initially, it was expected that this would happen from May, but it could be brought forward if there are no further increases in the price of money, according to experts. Those at Bankinter, for example, anticipated that the Euribor will end 2023 at 3.64%, decrease to 3.25% in 2024, and reach 2.75% in 2025.

For an average mortgage in Galicia – about 114,000 euros for almost 25 years, according to the latest data from the Property Registrars – with a differential on the Euribor of 1% and review in December, the monthly payment will go from 596 to 637 euros, 41 euros more, and from 7,155 to 7,640 euros for the year as a whole.

Experts expect this trend to continue over the coming days and months, although it will be gradual. Since it marked its annual maximum in September at 4.228%, the Euribor began to decline, especially from November 29 when it was placed below the 4% level.

The evolution of interest rates has made the mixed mortgage, which combines a period at a fixed rate with another at variable interest, the queen of the market in 2023. In the total loans for the purchase of a home formalized between the last quarter From last 2022 and the period from January to September of the current year, almost three quarters are at a variable rate in Galicia, while 23% of the loans are referenced to the Euribor.