this euribor in a year, the main reference for mortgages in Spain is once again over 1% at the daily rate, just like it was a few days last month and in contrast to the negative interests a year ago. Until last March, that reference remained in negative terrain it reached more than six years ago.
At this level, markets European Central Bank (ECB) This Thursday, with an interest rate of 0.25 percentage points, first in 11 years. In any case, given the high level of inflation (8.6% in June in the euro area and 10.2% in Spain), it cannot be excluded that the increase will be larger. That prospect brought the Spanish 10-year bond yield to 2.47%.
The 12-month Euribor has already crossed that threshold in mid-June for the first time in almost a decade., just when the ECB meets urgently after the risk premiums of southern European countries skyrocketed. It was 1.057 percent last Friday and 1.015 percent on Monday, bringing the month’s provisional average to 0.934 percent.
A year ago, Euribor was at -0.491%. This translates into more expensive index-linked variable mortgages. The increase will affect 4.1 million floating rate mortgages out of a total of 5.5 million unpaid mortgages in Spain.
The ECB announced in June that it would increase the reference rate for the first time since April 2011. The increase will bring the deposit facility to -0.25% (currently at -0.5%). But the most relevant will be the messages about the next steps. That could mean an even bigger hike in September.