Those with mortgages are starting to see the light at the end of the tunnel. The 12-month Euribor, the benchmark index for the majority of variable mortgages marketed in Spain, fell this Wednesday to a June 15 low of 3.983% on a daily basis, compared to 4.015% on Tuesday. The 4% drop in Euribor this Wednesday was the second drop in November It remained at 3.991% after Friday the 17th.
The monthly average for November stands at 4.029%. It represents the lowest percentage since June and the second monthly decline in 2023. It is also significantly lower than those recorded in both October (4.16%) and September (4.149%). After months of increases in parallel with the interest rate increase by the European Central Bank (ECB) to combat inflation that hit the European economy, the index closed at 4,007% in June.
The drop in the Eurozone Consumer Price Index (CPI) to 2.9% in October, one point below the European Central Bank’s target, led the market to believe that the central bank led by Christine Lagarde would definitely stop the interest rate increase. money and with it the limitation that Euribor reflects these days. This pause was a shock for European stock markets, and European stock markets in particular. Ibex 35 reached 10,000 points this TuesdayA figure that has remained untouched since February 2020.
In the case of Spain, this became clear on Wednesday: Inflation was at 3.2 percent in NovemberThat’s three tenths below the rate recorded in October, according to preliminary Consumer Price Index data published this Wednesday by the National Statistics Institute (INE).
Mortgages will still rise
The decline of Euribor does not mean a direct reduction in mortgages as these are reviewed annually or semi-annually based on the last value recorded by Euribor at the time of signing. “Despite the good news, quotas Variable mortgages may continue to rise in coming weeksbut there may be cheaper prices on updated loans next year,” they note from financial comparer HelpMyCash.
In November, the price of Euribor is close to 4.03%, higher than both six months ago (3.862%) and especially a year ago (2.828%). Then, Variable mortgage rates to be reviewed in coming weeks will increase after updateThis will increase the amount of your monthly payments.
When will variable mortgages go down?
Million dollar question. According to HelpMyCash mortgage expert Miquel Riera, Euribor exceeded 4% in June 2023. The analyst said that if the current trend of this index continues, “customers will likely “It will be reviewed every six months in December or January next year and cheaper wages will begin to be paid.”. “Those who get their annual updates from the second quarter of 2024 will also see declines – perhaps in April, being generous,” explains Riera.
The scenario most banks and real estate experts are working on is that Euribor will soften in line with inflation in the eurozone. If prices slow down in the coming months and the CPI approaches the 2% target, the ECB will not need to increase interest rates, which are currently 4.5%. The financial futures market predicts that the European currency will soon follow up with a 75 basis point interest rate cut in the second half of next year after the US Federal Reserve.
Mortgage company fell sharply
signature mortgages about housing decreased by 29.6% year on year in Septemberup to 31,054 credits, It is the largest decline since January 2021 and the seventh consecutive double-digit decline, as a result of the increase in interest rates on these loans.
Related news
Actually, average interest According to data published this Tuesday by the National Institute of Statistics, the prices charged by institutions on new home mortgages rose to 3.26%, the highest level since January 2016; This is a difference of more than one point from a year ago (INE).
56.2% of home mortgages signed in September were fixed rate, the lowest rate since March 2021. 43.8% of these loans are fixed interest loans. variable interest rate (this includes mixed mortgages).