The indicator is rising at the fastest pace in its history this year, with the October average standing at 2.629%
There is no rest for the mortgages. The Euribor maintains the upward path that started ten months ago and the monthly average bids farewell to October at 2.629%. It is the highest level since December 2008, when it stood at 3.452%. And not only that. Never before has the indicator to which most mortgages in Spain are referred to has recorded such an abrupt rise in its entire history in just one year.
“If you look at the historical figures, the speed at which the Euribor moves is usually around 0.2 and 0.5 points and has already moved more than three percentage points in the past year,” said Laura Martínez, spokesperson for financial comparator iSavings. Exactly one year ago, the 12-month Euribor moved at -0.477%.
The gap that has emerged over the past 12 months is essential for floating rate loans updated with October as the reference. For example, someone who has taken out a 30-year variable mortgage of 150,000 euros and with a difference of 0.99% plus Euribor, will receive an increase in his mortgage payments of about 230 euros, i.e. he would pay 450 euros per month from pay 680 euros for the revision, which is equivalent to an increase of 2,800 euros per year.
Keep in mind, however, that this calculation is an average, as not all loans are affected equally, such as factors such as the size of the debt, the time the mortgage was taken out or the commissions charged by the bank.
It should be borne in mind that while 75% of the outstanding balance of mortgages still has a floating interest rate, according to data from the Bank of Spain, most of the loans signed in recent years have had a fixed interest rate, so it is not will be affected by the indicator’s rebound. In addition, it is during the early years of the loan’s life when most of the tranche is earmarked for the payment of interest and less for the principal, with the households most affected by the Euribor recovery being the ones who have recently taken out their loans. , in the past five years.
These two factors have led banks to minimize the possibility of a wave of defaults in their mortgage portfolios in recent days. But they recognize that in the coming months there will be certain customers who will be affected by this fee increase at a time when their purchasing power declines due to the general price increase without a comparable wage adjustment.
According to the latest INE statistics from August, the average interest rate on mortgages was 2.52%. The average interest rate at the beginning is 2.09% for floating-rate residential mortgages, adding the differential used by banks, and 2.71% for fixed-rate mortgages. For example, it is currently almost impossible to find a fixed mortgage below 2%, compared to references below that level that were abundant in bank windows just a few months ago.
Faced with this situation, the government and banks have been negotiating for weeks to agree on new protections for affected families, going beyond the current code of conduct. But the final agreement has been delayed due to discrepancies over whether the aid should focus on extending mortgage payment terms, as the bank is proposing, or directly capping price increases.
The forecasts handled by the experts suggest that the Euribor will continue to rise to nearly 3% through the end of the year, a peak it could reach as early as 2023, despite the indicator’s daily price showing certain symptoms of exhaustion begins to reflect declines in recent October. A pullout that followed the last European Central Bank (ECB) meeting, in which the body decided on another 75 basis point rate hike, but moderated its speech by assuring that the next hikes would be made in line with the inflation and inflation outlook. the economy itself.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
