The Euribor, the principal reference for homeowners with variable-rate mortgages, is expected to edge higher but at a slower pace after a modest uptick in March. The provisional average sits at 3.720 percent, higher than last month’s 3.671 percent and the 3.647 percent of the same period last year, marking the highest level since November.
In the market, where the one-year daily Euribor recently hovered around 3.684 percent this week, traders await clearer signals from the European Central Bank. Christine Lagarde suggested a rate cut could begin as early as June, while Pablo Hernández de Cos, the governor of the Bank of Spain, told El Periódico that such a move would be normal to initiate in June. These statements have reinforced expectations that policy easing may arrive during the northern hemisphere summer.
Inflation, the trigger behind the rapid rise in interest rates since 2022 when they had sat near 0 percent for years, to the current peak around 4.50 percent, appears to be moderating. Yet the latest CPI advance from March shows an uptick to 3.2 percent from 2.8 percent in February, according to the National Statistics Institute. On a euro-area basis, the inflation rate was 2.6 percent in February, compared with 2.8 percent in January.
Between November and January, Euribor fell sharply as markets anticipated faster policy easing due to a softer eurozone economy and a larger-than-expected drop in inflation. Yet in recent weeks policymakers have convinced investors that a broader reduction in money costs is likelier to begin in the summer rather than the spring, aligning expectations with the improving inflation path and the economy’s slower pace of decline.
Last November the indicator averaged 4.022 percent; in December it dropped to 3.679 percent, and January’s rate slipped further to 3.609 percent. In March, the figure rose again to an average of 3.671 percent.
Despite the uptick in Euribor, annual mortgage payments are projected to ease in practical terms. An average mortgage of 140,451 euros over 24 years with a Euribor reference plus a 1 percent spread implies that March’s data would lift the monthly payment from about 810.01 euros to 815.83 euros. That is a rise of 5.82 euros per month and 69.85 euros per year. For a loan of 300,000 euros under the same terms, the monthly payment would shift from around 1,730.16 to 1,742.59 euros, an increase of 12.43 euros per month and 149.16 euros per year.
The projections indicate that annual-rate mortgage payments will continue to moderate as the Euribor aligns closer to the year-ago level, with some experts expecting ease once rates dip below that benchmark, potentially by summer. Last June, the rate exceeded 4 percent, and if the trajectory remains below that threshold in the coming months, annual payment estimates could start to decline, mirroring the earlier pattern of semiannual adjustments at work.
Looking backward, the December drop from 4.022 percent to 3.679 percent, followed by a January slip to 3.609 percent, and a March uptick to 3.671 percent, suggests a persistent but gradually easing pressure on payments for homeowners with variable-rate terms as the calendar turns.
Analysts see early summer as a potential turning point for many households. A stabilizing inflation path combined with anticipated policy easing creates room for mortgage costs to ease in the near term, even if the Euribor remains elevated in the meantime. Borrowers are advised to monitor their loan specifics, including the precise spread over Euribor and the remaining term of their mortgage, to gauge the real impact on monthly outlays.
Experts emphasize that the broader picture matters: inflation moderation, currency stability, and the pace of central bank policy shifts all shape the path of mortgage costs. For Canadian and U.S. readers, the takeaway remains consistent—watch benchmark rates, understand how loans are indexed, and prepare for small, steady changes rather than dramatic swings.
In practical terms, planning a mortgage strategy today involves modeling how different rate scenarios could affect payments, remaining years, and total interest. While the exact timing of any rate cut remains uncertain, the consensus points to gradual easing later in the year, with borrowers positioned to benefit if adjustments occur as anticipated. Ongoing analysis and personalized calculations can provide clearer guidance for households weighing refinancing, renewal, or new borrowing plans, and the best approach is to stay informed about central-bank communications and key economic indicators. Citations refer to INE CPI data, national statistics agency, ECB communications, and Bank of Spain interview sources for attribution.