HE euribor He became the big hero of 2023It was a year of strong rise in this indicator, which caused an increase in the payments of all citizens with variable mortgages. However, we closed the year with success. indicator stabilizationSimone Colombelli, Mortgage Director at mortgage comparer and advisor iAhorro, says: “The second half of 2022 was a very bad time for mortgage holders, with very sharp increases.” “For holders of variable rate mortgages, we thought this could be extended through 2023.”
The main factor that stopped the expected decline in the mortgage market was Euribor, the most used reference index for variable mortgages in Europe. This index started the year at 3.337% after completing December 2022 at 3.018%. From that moment on, increases in this indicator slowed down and A phase of greater stability began.
The first decrease was recorded in Euribor in August: The eighth month of the year closed at 4.073%, with a decrease of 0.076 points from the 4.149% level recorded in July. However, although the slowdown in increases is evident, HE ECB continued to raise rates and this drop in Euribor appeared to be just a mirage: it regained the ground lost after the close in September at 4.149%; In October, Euribor continued its rise to 4.160%, the highest figure recorded in almost 15 years since November 2008.
But, The turning point came when we least expected it.. Although few dare to confirm that 4.160% will be the Euribor ceiling, the decline recorded in November has given rise to hopes that it is now consolidated in December: Euribor is already even below 4.160% and could end this month last month. It fell below 3.7% in 2023 after recording its biggest inter-month decline since February 2009. Specifically, in just one month, Euribor fell by almost three tenths to 3.706%, down from the 4.022% it recorded at the November close. In the absence of three days of data, it records to cover the December average.
Colombelli makes three predictions about what might happen in 2024: one optimistic, one moderate, and the other more pessimistic. In the first case, Euribor could record values close to 3.2% in the spring and finish next year around 2.5%. In the most moderate or realistic scenario, this indicator will register values close to 3.5% between March and April, close to 3.3% at the beginning of summer, and may end the year around 2.7%, roughly one percentage point below. currently stored values. In the pessimistic scenario, there will be a decline, albeit slower and progressive, and data close to 3% will not be reached until the end of the year.
What will be the best mortgage in 2024?
rises interest rates and Euribor This led banks to continue to make mortgage products more expensive, and after a long period of being no longer an attractive product for customers, hybrid mortgages became the queen of the market. “In fact, since this year we have seen both customers and banks choosing to sign hybrid mortgages rather than fixed or variable mortgages. For example, almost 64% of users who signed a mortgage with iAhorro in February chose a hybrid mortgage; only 23% chose the mixed mortgage and 14% the variable mortgage,” adds Simone Colombelli. “This upward trend in mixed ones was seen throughout the year; in November, for example, they accounted for 72% of the signatures.”
This trend is particularly surprising when we look back at an era when the fixed mortgage was the undisputed queen. Why did this change occur? The rise in Euribor has made variable mortgages much more expensiveThe increase in interest rates, whose TIN is calculated by adding the data of this reference index to the differential, has done the same for fixed mortgages, and we can now see offers with interest rates close to 4%. That’s why banks decided to invest in hybrid mortgages, a product that people are demanding.
This type of mortgage has a fixed initial period, which can last between three and fifteen years, depending on the bank, and a second variable period until the end of the mortgage. Therefore, “the mixed mortgage provided the assurance that the installments would not increase no matter how much the Euribor continued to rise for several years, and also added a scroll down until you reach the variable sectionA spokesperson for the mortgage comparator explains: “A mixed mortgage is cheaper than a fixed one in its first term and therefore more attractive to customers, and does not have such high spreads in its second term.” ”. For example, today we can find good mixed mortgages below 2.5% TIN for the fixed part, with differences between 0.5% and 07% depending on the client’s profile.
What will happen in the coming months? Mortgage manager at iAhorro believes: “The biggest benefit of the decline in Euribor may be fixed mortgages”. This is because, due to the recent rise in the Euribor, most Spaniards are afraid of variable mortgages, even though they have been the dominant mortgages in the market since records began and until 2020. Moreover, more than half of the mortgages in force in Spain are variable rate.
But Colombelli adds: “change is permanent. What we need to see is that after 2023, when karma prevails, there will be a recovery in the fixed in 2024 due to possible improvements in Euribor, especially in the second half of the year. This will depend on the financial institutions responsible for reactivating the market. “If it passes, in the long run we could see a French-style Spain where most loans are managed at fixed rates.”
Housing prices continue without falling
In addition to Euribor and interest rates, it was housing prices that continued to rise despite all predictions. “This indicator seems to be doesn’t want to go downEspecially in big cities where the housing supply problem is greater and the demand is also much greater,” says a spokesperson for mortgage comparator iAhorro.
For example, cities such as Madrid, Barcelona, Bilbao or some parts of the Balearic Islands keep prices very high. According to the latest data provided by the National Institute of Statistics (INE), the highest average price in terms of autonomous community is currently found precisely in the Balearic Islands, with an average of 3,943 euros per square meter. These are followed by the Community of Madrid (3,098 euros per square meter), the Basque Country (2,845 euros) and Catalonia (2,455 euros), which is very close to the Canary Islands (2,399 euros).
Moreover, when we compare these data with the data of a year ago, we see that these prices have not decreased or even increased. For example, in August 2022, during the peak summer season, the average price in the Balearic Islands was 3,894 euros per square meter, 49 euros lower than now; In the Community of Madrid it amounted to 2,904 euros (194 euros less), in the Basque Country it amounted to 2,794 euros (51 euros less) and in Catalonia it amounted to 2,299 euros (156 euros less).
Colombelli said that the places where the declines were seen were “the most areas with low demandespecially when most of the offers correspond to old apartments that need to be renovated in order to be lived in. “Because renovation prices have increased rapidly and homeowners have reduced their prices to sell these types of houses,” he said. This may be the case of Asturias, where the average price per square meter has risen from 1,199 euros to the current 1,155 euros; Castilla y León, from 1,099 euros to 1,045 euros per square meter; or Castilla La Mancha, where a year ago the average price per square meter was 915 euros and fell to an average of 900 euros.