Sawtooth. HE euribor up to 12 monthsThe reference used for the variable rate mortgage is once again above the official price of money (3.5%) after the installment payers, which referenced this variable in April last year, fell under a real zigzag. broke out of negative territory and hasn’t stopped rising ever since. What’s going on?
Where can Euribor go?
Most of the experts variable rate mortgage It will be around 4%. According to the latest analysis by the savings bank institution funcasEuribor would peak at 4% in the second half of this year, falling below 3.5% by the end of 2024. In fact, Silicon Valley Bank (SVB) was about to reach 4% until it fell, and Signature Bank is in the US. Then the banks (Euribor is the interest they lend to each other) commented that the European Central Bank (ECB) would soften its policy of raising interest rates to combat inflation, and the Reserve would do so. . Therefore, Euribor was reduced. However, the euro zone monetary authority continued its course and increased the interest rates announced for weeks by 0.50 points to 3.5%. The Federal Reserve increased rates by 0.25 percentage points to between 4.75% and 5%. This has caused the Euribor price to rise again, but we wait to see if the next rate hikes will be confirmed. If the banks interpret that the increases will be softened or stopped, the Euribor will necessarily fall again. On the other hand, according to experts, if they detect signs of increase, the rise will continue.
How has the index developed in recent days?
Just a week ago, the 12-month Euribor’s daily rate fell to 3.359 percent, the lowest level since January 27. It had dropped from 3,858% to 3,509% two days ago. Then, after stalling at 3.468 percent on Wednesday, it recorded ups and downs until reaching 3,578 percent this Thursday, which is 3.5 percent above official interest rates. With this development, the average so far this month is 3.68%. The wobbles have to do with the interpretation banks make about the evolution of interest rates. The cuts, he says, mean the ECB will slow or even pause interest rate hikes. The reverse trend assumes the reverse interpretation.
What is the impact on the mortgage?
To get an idea of the impact of the variations, it’s enough to look back 12 months, March 2022. Mortgage of 150.000 Euro for 24 years with 1% Euribor difference, paid in monthly installments of 540.14. euro. The same loan, which averaged 17 days in March of the current year, would charge 867.89 today, ie 327.75 euros per month or 3,933 euros per year. It would have been 876.42 if the one registered on the 13 was applied. In any case, the correct reference is the reference calculated at the end of the month. For example, in February this average was 3,534%, so the monthly payment for the same mortgage with the same terms went from 563.51 to 855.51, 292 euros or 3,504 euros more per year.