The benchmark index for variable mortgages has been cut for the second month in a row this year, although experts predict it will stabilize pending the European Central Bank’s next steps.
The annual Euribor, the indicator most used to calculate variable mortgages in Spain, closed May lower, at 3.680%, down from 3.703% in April, linking two months of declines, although experts predict that this will stabilize pending next month. steps taken by the European Central Bank (ECB).
With the new reduction, the Euribor will make the installments of variable mortgages, which are revised annually, cheaper. A year ago, in May 2023, it was 3.862%.
So for a variable mortgage of 150,000 euros, a term of 25 years and an interest rate of Euribor plus 1%, the The costs are reduced by approximately 180 euros per year.
In statements to EFE, ATL Capital’s investment director Ignacio Cantos indicated that the new drop in the Euribor is due to the market discounting the next ECB interest rate cut, scheduled for June.
In this sense, he assured that after June, and when new declines in 2024 are not taken into account, the indicator could drop significantly.
“It is true that the market probably expected further rate cuts before 2024,” said the analyst, whose resistance to inflation on this front is raising doubts and has fueled more resistance to the fall of the Euribor.
HelpMyCash analysts also emphasize that the Euribor is moderating, and although slowly, maintaining its downward trend.
Mortgage analyst Miquel Riera agrees that the Euribor will fall again as a result of the foreseeable interest rate cut that the ECB will announce on June 6.
However, he indicates that it remains to be seen whether the Euribor will be affected by the ECB’s interest rate cut, taking into account the uncertainty that the eurozone economy is experiencing as a result of the conflicts in Ukraine and Israel.
“These geopolitical tensions could lead eurozone countries to increase public spending on defense and the arms industry, which could trigger a rise in inflation,” said Riera, who foresees a cautious ECB regarding its next steps.
That is why he believes that the Euribor could stagnate if no further interest rate cuts are expected, although everything will depend on the development of inflation.
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.
