Finally, the Euribor remained below 4.2 percent, closing at a precise 4.160 percent. That figure is only 0.011 points higher than in September, when it stood at 4.149 percent, signaling a subtle yet notable pause in upward movement.
Will it stay under 4.2 percent in the coming months? Market observers note that Euribor has resisted crossing the 4.2 percent barrier more than expected. It has hovered around 4 percent for five months, with total gains not exceeding two tenths. This stability is encouraging, especially when one recalls how easily that two-tenths could be added from one month to the next in prior periods. The current pattern suggests a stabilizing trend, though further movements will depend on actions by the European Central Bank and its readiness to adjust policy if inflation remains stubbornly high. Mortgage expert Simone Colombelli, a director at the mortgage comparator platform iAhorro, emphasizes the potential for the ECB to adjust policy cautiously, noting that any additional tightening would hinge on evolving inflation dynamics and macroeconomic signals.
In late October the ECB, led by Christine Lagarde, approved a rate hike that brought the key rate to 4.5 percent. The decision sets the stage for the upcoming policy meeting on December 14, where investors will scrutinize for any signal of another 0.25 percentage point increase or a wait-and-see stance into 2024. Colombelli points out that the path forward is uncertain, with a clear expectation that further moves could be on the table as inflation pressures persist in various economies within the euro area.
So why are more rate increases anticipated in 2024? The aim is to steer inflation back toward the target of 2 percent across eurozone countries. While the overall eurozone CPI currently sits around 4.3 percent, there are pockets of divergence. Some member states, such as Greece, Norway, and Belgium, have reached relatively favorable levels, whereas others, including Germany, Croatia, and Hungary, still face higher readings and structural challenges that influence monetary policy decisions.
In Spain, preliminary October CPI data point to a 3.5 percent year-over-year increase, unchanged from September, according to official statistics. The softer trajectory is attributed to easing fuel prices and a slower rise in food and energy costs compared with earlier months, contributing to some relief in living expenses for households.
As the year draws to a close, banks are intent on presenting robust performance figures. Yet they are selective about the profiles they consider creditworthy. The market appears to be segmenting, with strong bids but concentrated on applicants who can demonstrate solvency and security. This pattern reflects a cautious lending environment driven by risk management priorities rather than a simple appetite for new business.
Analysts note that while some borrowers may receive favorable terms from certain institutions, others will not. Financial institutions tend to favor particular customer types, especially in more volatile times, highlighting the importance of comparing offers across banks to secure the most favorable conditions. Colombelli reiterates the point that in such conditions, assessing multiple lenders becomes essential for finding the best fit for individual circumstances.
One underlying reason for the stricter lending stance is risk aversion during periods of financial stress. Banks tighten requirements to shield themselves from potential missed payments. This tighter stance also affects mortgage pricing and the availability of credit. If collateral such as the mortgaged home declines in value, the protection it offers to the lender weakens, potentially leaving a gap if the borrower cannot meet obligations.
The practical takeaway for borrowers is clear: the landscape for mortgage offers varies across institutions, and shopping around yields tangible benefits. The emphasis is on comparing rates, terms, and conditions across banks to identify the most favorable package that aligns with a borrower’s financial profile and repayment capacity. This approach helps ensure access to competitive rates and safer lending terms as conditions evolve across the market, according to iAhorro’s guidance from their mortgage experts.