Euribor breaks all forecasts in May, causing an overall increase in mortgage interest rates

From April 21 to Tuesday, May 31, 2022, Euribor recorded all its positive values ​​for the 29th in a row. Given that this adjustable-rate mortgage comparison is only posted on business days, May was the first full month since January 2016. no negative data.

Therefore, the increase so far this year has been significantly more than -0.477% in January to 0.287% today, more than seven-tenths. And if we do the annual comparison, the growth was 159.67% from -0.481% that Euribor pointed out in May 2021. What caused this explosion? “We are going through a crisis,” said Simone Colombelli, director of Mortgages at iAhorro. exceptional macroeconomic situationSince the start of the war between Ukraine and Russia in February, which sparked an unprecedented energy crisis in Europe and triggered inflation in Spain, which stood at 8.7% this month.

Euribor’s Evolution. iSavings

To try to predict how Euribor will develop in the coming months, Colombelli did the calculation “assuming the trend Euribor has pointed out so far this year and the indicator will continue along the same lines”. That way, the mortgage comparator’s spokesperson adds, “We’re seeing how Euribor broke all the estimates and 2022, this indicator could end around 1.35%”. This is without taking into account that the European Central Bank (ECB) plans to raise interest rates throughout July, so the increase could be even higher.

How much will variable mortgage payments increase?

The triggering of Euribor affects, first of all, those who already own floating rate mortgages and need to review the monthly installments of the mortgage loan in May, because they will be able to observe how it rises to 101.31 euros per month or what is the same. , 1,215,72 Euros per year. This is just the mortgage amount. 300.000 €Hired in 2021 30 year payment term and the spread applied to it is 0.99%+euribor. With these terms, the person in question will go to 1,000.06 without paying 898.75 euros per month due to the increase in Euribor.

In case of mortgage loan 150.000 €In addition, in 30 years and with a difference of 0.99%+euribor, the monthly installment will increase from 449.38 Euros to 500.03 Euros, which means an increase of 50.65 Euros per month and 607.80 Euros per year.

Mixed mortgage is a good option for teenagers

The increase in Euribor also leads to an overall increase in mortgage interest rates. “With the rise in Euribor, financial institutions are gradually launching their offerings. flat rates around 2%A figure that was very common in 2017 or 2018, but almost double what we saw in 2021,” explains the Mortgage manager at iAhorro, encouraging the undecided: “You can still find mortgages under 2 on a fixed property. %. It may be the last train for those who want to find cheap fixed-rate mortgages,” he said.

As Simone Colombelli has analyzed, “banks themselves adjustable mortgage so that it can once again become the star of the Spanish market”, but also ” mixed mortgage and there are already interesting options in this regard where conditions in the fixed tranche (first 7-10 years of the loan) are quite good”.

This product is recommended for “these” by the mortgage comparator’s spokesperson. youth For those who have the ability to change the terms of their loan before reaching the floating tranche (final years of the mortgage) and who want the peace of mind of fixed rates but do not get a big loan offers in this sense now because of the bank’s commitment to the variable”.

Source: Informacion


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