HE euribor recorded the lowest monthly increase Since the war between Ukraine and Russia began at the end of February 2022. This was exactly what triggered the insane increases this reference index of variable mortgages has experienced over the past twelve months: from negative to March 2023, in the absence of a daily data to know the exact average, 3.652%
However, the bankruptcy of Silicon Valley Bank on the 10th of this month, followed by the bailout of Credit Suisse Group, has quenched the boom in the past two weeks. “We bet at the beginning of the month it would close at 4%, but we’ve seen a lot of ups and downs and the 4% has come off a bit”, Simone Colombelli, director of Mortgages at the mortgage benchmarking organization iAhorro, explains, but “we continue to think this indicator will reach 4% this spring.”
Euribor could exceed 4% this month
So much so that, according to an estimate made by iAhorro, if Euribor had followed the same growth trend at the beginning of the month, with an average of 0.2 points in just seven working days, We could have easily reached 4.1% on the 31st day. “Based on our internal calculations, we can say that the bankruptcy of Silicon Valley Bank impacted the rise of Euribor by 0.5 percentage points,” said Simone Colombelli, qualified. He will be able to predict what we will reach.”
The bankruptcy of the SVB also caused Euribor to record its lowest monthly increase in a whole year: it has grown by only 0.118 percentage points since last February, when it closed at 3,534 percent. Despite all this, The European Central Bank did not stop the rise in the exchange rate interest rates Expected officials: 0.5% more, which means they are now 3.5%. This leads us to a difference of only 0.15 points between official interest rates and Euribor, while the normal distance is around 0.6 points on average.
Therefore, the iAhorro spokesperson dares to say it. “We can expect another increase in interest rates” AMB this spring”The head of the European organization, Christine Lagarde, did not promise to raise any more for the time being, and as she stated in her latest statements, the movements in interest rates from now on “banks”.
Variable rate mortgages will pay 300 to 600 euros more each month
Even if the rise we have seen in Euribor this month is small, those who have had to make a variable mortgage contract and review it this month will see their installments increase considerably. Because? Just a year ago, in March 2022, Euribor was still negative (-0.237%), so those taking variable rate mortgages barely paid interest, but as of this month they will already have to pay the bank a TIN that is definitely above 4%.
For example, they calculate from iAhorro, whoever has to review a variable mortgage of €150,000 over 30 years at Euribor + 0.99% differential interest rate will see how their fees are. From 761.67 euros to 465.63 euros per month. This translates to an increase of 296.04 euros per month and up to 3,552.51 euros per year.
And the larger the loan amount, the more it will cost. For a mortgage of 300,000 euros, again for 30 years and Euribor TIN + 0.99%, the fee will be doubled: up to 592.09 euros per month, because now you will pay 1,523.34 euros per month for 931.26 so far I paid. In this case, the annual increase exceeds 7.000 Euros, especially to 7.105.02 Euros.
There are still fixed mortgages with TIN under Euribor
“Although we have seen increases in commercial offers from banks (eg Abanca or BBVA) in recent days, they have not been so sudden. The terms they offer remain and still are under Euribor, in a fixed mortgage. we see that some of them are even below 3% TIN”details by Simone Colombelli.
This leads us to the conclusion that “banks are far from seeing a dark situation in the market”. Organizations are betting that conditions will improve in the long run: if they now give you a mortgage below Euribor with a maturity of 20-30 years, they expect the situation not to get much worse because otherwise it wouldn’t get any worse. The manager of iAhorro Mortgages, let it be profitable for them, give it” concludes.