The Euribor picks up again in May and anticipates the increase in variable mortgages that are reviewed annually
The recent rise in the Euribor, the indicator to which most mortgages in Spain are referred, threatens to seriously hit homeowners’ wallets. According to data from CaixaBank Research, Spanish households already spend 33.4% of all their income on mortgage payments. And the company’s estimates — made on the basis of its projections on home price trends, gross disposable income and mortgage interest rates — suggest this mortgage effort could increase by about 3.2 percentage points to 36.6 in just two years. % at the end of 2023.
The ratio is still a long way from the 54.6% peak that was reached during the previous financial crisis, but it implies a remarkable increase that could deteriorate even further, to 39.2%, if market expectations are held. and that can be seen the implied interest rates. These point in particular to an increase in the 12-month Euribor to 1.06% this year and to 2% at the end of next year.
For now, with the rebound in recent weeks and with only two sessions left to close out the month, the preliminary May average marked by the indicator stands at 0.285%. If it closes at these levels, a 20-year mortgage of 150,000 euros with a difference of Euribor +1%, which is revised annually, would experience an increase of 50 euros per month in its monthly installment. That is 600 euros per year.
Despite everything, the experts are calling for calm and remember that this escalation will not affect all families abruptly. Mainly because of the recent boom in fixed rate mortgages, which already account for 73% of new loans taken out compared to variable loans. As a result, the expected interest rate hike would have a more limited impact on recently mortgaged homes.
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.
