The Euribor stood at 3.647% in March. This increase will be much felt by those who need to review their quotas with that index. Per 100,000 euros of outstanding capital, the monthly mortgage payment increases by about 190 euros.
Euskaraz irakurri: Euriborra, urtebeteko igoerak atsedenik gabe
The Euribor is celebrating a year of relentless rises. In February 2016, the Euribor was negative for the first time in its history. Since that day, and for more than 6 years, this reference index for calculating most mortgages has always remained negative, reaching an all-time low of -0.504% in January 2021.
A year later, however in January 2022, the Euribor started an unstoppable rise. In March, this index reached 3.647%, which is 0.113 points more than the previous month.
Euribor chart. Photo: EITB Media.
The Euribor is the index to which most mortgages refer. Depending on how the index evolves, they will have to pay more or less each month for their home loan.
A heavy burden for variable rate mortgages
This increase will be much felt by those who need to review their quotas with that index. For every 100,000 euros in outstanding capital, the monthly mortgage payment increases by about 190 euros, so you pay about 2,280 euros more annually for every 100,000 euros.
According to the report on the social impact of the rise in interest rates in the Basque Country, the average mortgage in the Basque Autonomous Community has risen to 720 euros. The Basques spend 30% of their income on their payment, bordering on what is considered acceptable. The report from the Basque government’s housing ministry asks banks for flexibility towards their customers, expecting families’ problems with mortgage payments to worsen in 2023 and next year.
According to a study prepared using data from the real estate portal Fotocasa and the InfoJobs platform, last year the average price of housing in the Basque Country was 233,000 euros and the average salary was 25,400 euros, with which to settle the housing payment should be allocated the full gross salary for 9.2 years, an effort slightly higher than in 2021 (9.1),
Will the Euribor continue to rise?
According to the Organization of Consumers and Users (OCU), given the current uncertainty, it is difficult to know how much interest rates may rise and for how long. On the one hand, we still have very high inflation, which the central banks of the various economies, including the European Central Bank, are trying to curb by raising interest rates, which inevitably leads to increases in the Euribor.
On the other hand, we are facing a slowdown in economies and a possible financial crisis due to the fall of Silicon Valley Bank and Credit Suisse, something which could be exacerbated by a rise in interest rates: the European Central Bank will manage a balance between inflation and the prevent a slowdown in the euro area economies.
Given this scenario, it is very difficult to make predictions. The priority right now is to try to address inflation so it’s realistic to think that interest rates will continue to rise but it’s also about avoiding an economic slowdown so it’s necessary to strike a balance to find.
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Source: EITB
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.
