The Euribor indicator continues to rise without a ceiling, affecting the mortgage market across Spain and beyond. This daily rate surpassed the 3% barrier for the first time in over a decade, reaching 3.057% for the first time since December 2008. By December, the index hovered at 2.884%, edging above November’s 2.828%. The leap in the variable rate mortgage places renewed pressure on households, with interannual variation still substantial, roughly three thousand three hundred eighty-six points in yearly terms. This shift makes it essential to review this month’s index and its steep ascent.
For a mortgage of 150,000 euros over 24 years with a Euribor plus 1%, the payment would rise from 552 euros to 843 euros. That is 291 euros more each month and 3,492 euros more per year. For a 300,000 euro loan under the same terms, the payment would move from 1,105 euros to 1,686 euros, an increase of 581 euros each month and 6,972 euros yearly.
The relentless rise in Euribor makes borrowing more expensive as the year progresses. Variable rate installments rise, while fixed-rate installments remain unaffected. The worst may still be ahead. Since last November, revisions have started to exceed 3% and will likely persist at strong levels for about a year. The largest increases are expected to hit the regions most heavily in the near term.
While some loans exist for buying housing with a variable rate, most are reviewed semiannually or annually. Quotas rise when Euribor is higher than the previous year for the month used as the reference for the loan review. The main reason for the pronounced increases beginning in October is that the reference Euribor is usually two months behind the current month.
In practical terms, a mortgage set with an October review uses the August index (which stood at 1.747 points above August 2021). November follows with the September index (2.725 points higher). December reviews use the October index (3.102 points). January reviews mirror November (3.32 points noted), and February follows December. Revisions typically occur in March and July, reflecting year-to-year differences in Euribor, ranging from 0.028 to 0.768 points. August showed a 1.336-point difference and September a 1.483-point difference.
unprecedented climbs
Year-over-year differences remain unusually large, as Euribor closed last year at record lows (-0.502% in December) and now averages around 2.8% monthly since the index began in 1999. Experts anticipate further increases in mortgage installments in the coming months.
Analysts expect a gradual easing to begin around the summer, with more pronounced relief projected in October and November as interannual differences shrink relative to current index levels. This dynamic has prompted state-supported programs to encourage banks to offer assistance to vulnerable borrowers, with measures set to take effect on January 1.
Euribor reflects the average interest rate at which banks lend to each other. The sharp rise responds to the European Central Bank’s policy stance, with the ECB signaling additional increases this year and next at a pace faster than many market participants had anticipated. The monetary authority has signaled a tightened stance to curb inflation as rates move to higher levels.