A serious rise euribor This has happened in the last two years Big increase in variable mortgage prices. These loans calculate interest rates with the average data recorded by Euribor every month. Therefore, those who sign variable mortgages when this benchmark index is negative will see how their payments become significantly more expensive over time. Reaching these indicator values above 4% by the end of 2023. Specifically, these mortgage holders, Up to 8,000 Euros morein the last two years, according to calculations by mortgage comparator and advisor iAhorro.
“Variable mortgages may be reviewed quarterly, semi-annually or annually, depending on the financial institution you contract with and the agreement you reach with them. Of course, the most common is for the review to be annual, but many people already do semi-annual reviews,” they say. iSavings.
October is the worst month for mortgage holders, according to annual review
If they had to review their installments annually, those who used variable housing loans in 2021 saw increases only in their installments. Moreover, According to the mortgage comparator’s calculations, the highest increase in prices occurred in October. The main reason for this is that Euribor recorded the highest figure in 15 years (4.160%) in October 2023, meaning that those who had to review their mortgage loan that month will have a greater increase in their installments than those who reviewed it before. after that.
For example, the person who signed A. mortgage from 150,000 Euribor is a 30-year euro with a spread of +0.99% and started paying 449.18 euros in October 2021 at annual review. However, at the first annual review, this mortgage holder faces a significant increase in his payment and starts paying 643.37 euros, because in October 2022 the reference index had already started to rise and even exceeded 2% (2.233%).
And to this increase of 225.49 euros, a further increase of 126.44 euros will need to be added in 2023: In October of the same year, Euribor recorded an all-time high and the payment on this mortgage increased to 801.57 euros. This means that this mortgage holder experienced a 78.27% increase in their mortgage payment for a cumulative €351.93 each month (€4,223.16 in total) over two years.
If the amount of this mortgage was larger, the increases would be steeper. For example, Variable mortgage of 300,000 euros With the conditions mentioned in the previous example, we see that if signed in October 2021, the starting fee is 899.28 euros per month, in the second year it rises to 1,350.26 euros and in 2023 it rises even further to 1,603.14. Euro. This means an accumulated cost increase of 703.86 euros per month, in other words, the mortgagee has paid a total of 8,446.32 euros more in interest over the last two years due to the rise in Euribor.
Those with mortgages taken out in April, reviewed every six months, experience the biggest increases
Those who signed variable mortgages following the same argument as in the previous case six month review Also, these will be the ones experiencing the biggest increase so far throughout 2021 and throughout April because This mortgage is reviewed every October in addition to every April.S.
Therefore, those who signed in April 2021 Variable mortgage of 150,000 euros He went from paying an installment of 449.18 euros for a 30-year mortgage, reviewed semi-annually and referring to a difference of Euribor plus 0.99%, to paying 786.81 euros a month. Therefore, in this case, the accumulated monthly increase was 337.64 euros, and due to the increase in the reference index, he paid 4,051.63 euros more in interest on the loan he gave to the bank in two years.
And if the amount of this mortgage increases Up to 300,000 EurosWith the same features, the increases will be doubled: the mortgagee will now pay up to 675.27 euros more for his loan than two years ago, and the accumulated annual increase will increase to 8,103.25 euros.
To explain the differences between a variable mortgage with an annual review and a variable mortgage with a semiannual review, Simone Colombelli, Mortgages manager at iAhorro, assures: “When Euribor is on the rise, the first to be affected by the increase are mortgage holders in the price of the installments, at a variable rate with a semiannual review because the fee is lower It does so more often (twice per year) than at annual review (1 per year), although it increases gradually. year).” Of course, he also adds: “There are no big differences in general.”