Good news for people with variable mortgages. Euribor stood at 4.073% at the end of August, a touch lower than July by 0.076 percentage points. This small dip, however, does not signal a new trend for Euribor. Historically, August has often seen fluctuations due to seasonal slowdowns, and experts expect a continuation of movement into September. The mortgage manager at iAhorro notes that the current pattern resembles seasonality more than a consistent downtrend, with further adjustments likely as markets respond to mixed signals.
Looking ahead to September, banks are prepared to offer modified terms on various products. Dips may occur, but those shifts are expected to arise from promotional campaigns ahead of Christmas rather than a stable response to the broader market conditions, according to Simone Colombelli of iAhorro.
Against this backdrop, consumers seeking variable-rate mortgages can find products with highly attractive terms. A notable option is the Freedom Mortgage from Banco Mediolanum, featuring an Euribor plus 0.79% (0.99% in the first year), an APR around 3.60%, and a loan interest rate that sits on top of the Euribor base. To qualify, an applicant typically needs to open an account with the bank, demonstrate recurring income of at least 3,000 euros, and maintain life insurance.
Another option is Euribor with a spread of 0.48% (2.20% in the first two years) and an APR of 4.50%. This product often requires direct payroll collection, unemployment benefits or pension income, and home insurance above 600 euros.
Meanwhile, BBVA offers a variable mortgage with Euribor plus 0.60% (1.49% in the first year) and an APR of 5.43%. The terms typically include directing payroll and taking out two insurances, one for the home and one for loan repayment.
Ibercaja presents a similar setup with Euribor plus 0.60% (1.50% in the first year) and a 5.37% APR, subject to direct payroll deposits, regular receipts, use of the bank’s credit card, two insurances (life and home), and periodic contributions to one of Ibercaja’s mutual funds.
For those who prefer fewer attachments on a mortgage, a viable option exists. A variable mortgage from Euribor with a spread of 0.75% (1.50% in the first year) and an APR of 5.07% can be attractive when the borrower opens an account with the institution, starts a pension plan, and procures two insurances, life and home.
Will there be any rate hikes in the coming months?
An uptick in rates usually pushes Euribor higher. The European Central Bank (ECB) implemented a policy to curb inflation, but the effect has not fully materialized yet.
Following the American trend, the ECB may approve another 0.25 percentage point increase on September 14, or it may opt to pause and reassess before acting again, according to iAhorro’s mortgage team.
That said, a prolonged series of increases is not expected in the near term. While some EU countries may see more frequent moves, others will adjust more gradually. The overall stance is likely to be cautious, with occasional rises to contain inflation, and then pauses as needed, Colombelli adds.
In summary, variable-rate mortgages continue to present a mix of opportunities and constraints. Borrowers should assess their own financial structure, the bank’s terms, and the total cost of borrowing over time. Market participants in Canada and the United States should watch central bank signals, lender promotions, and the exact mix of fixed versus variable elements to determine the best fit for their housing needs. [citation: iAhorro mortgage management notes; market analysis]
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