The index’s reaction to the ECB’s decision could be as high as 4% mid-year as interest rates continue to rise
Euribor’s reaction to the eurozone’s first interest rate rise this year led the index to reach almost 3.5%, a benchmark it had not seen since late 2008, when the previous financial crisis began. Specifically, it stood at 3.45% this Wednesday, a daily level it hadn’t reached in 14 years.
Although the first movements of the Euribor after the decision of the European Central Bank (ECB) to raise the official price of money were hesitant, finally the index most used for calculating mortgages has continued its rise since last summer . Without truce.
With rates of 3%, it is very likely that the Euribor will rise further to the level of 4%, which is no longer ruled out by any analyst and not even by the major Spanish entities. In the presentation of the results that ended last week, all banks indicated that the index could climb towards that reference in this first semester. It would be pending the new rate hike that Frankfurt could approve at its meeting in March, and any subsequent decisions depending on how inflation develops in these months.
For now, with just eight sessions passed in February, the Euribor average stands at 3.4%, which is a step up from the 3.3% it ended January with. When compared to last year’s records for these dates, the index then moved at -0.33%. Negative. In other words, it’s up nearly 3.1 points, implying a significant increase in mortgage payments that the monthly payment review now covers.
In this sense, the iAhorro portal points out that taking out a mortgage at a fixed rate of 3.8% would be profitable for those who have a mortgage in the future, in case the Euribor goes on a pessimistic path and the levels achieved previously observed. Crisis of 2008. This counting on the index does not exceed the 4% limit in which, it seems, it can be located.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
