Euribor trends have become a focal point for those reviewing floating-rate mortgages in Spain. The latest market data show a continued rise through the first half of August, with the average edging beyond 1%. This marks a notable shift from recent years and signals higher costs for home loans that reference the euro interbank rate.
Since July 2012, an average monthly level above 1% has not been reached, as borrowing costs in the housing market have fluctuated. The current movement indicates increased payments for many borrowers who rely on Euribor as a reference rate.
In the first half of August, the twelve-month Euribor is currently around 1.064% on average, reflecting a more expensive cost of funding in the interbank market.
On Monday, the twelve-month rate stood at 1.158%, with the index surpassing 1% on eight of the eleven August trading days observed so far. This pattern highlights persistent upward pressure in the rate that underpins many variable-rate mortgages.
From the start of the year, the twelve-month Euribor has moved into positive territory after spending much of the previous year negative. It shifted from −0.502% in December of the prior year to approximately 0.013% in April as markets recalibrated funding costs.
The monthly average for Euribor last month reached 0.992%, the highest such figure in about ten years and an indication that rates have climbed to levels not seen in a long period.
If Euribor remains on an upward trajectory through August, many mortgage payments could see further increases. Homeowners with variable-rate loans may experience higher monthly obligations as the reference rate rises.
To illustrate the potential impact, imagine a 150,000 euro loan with a 25-year term where the Euribor rate is used as a reference and a margin of 1% is added. If Euribor holds at about 1% with these conditions, the annual mortgage cost would rise by roughly 108.6 euros, or about 1,303.2 euros per year.
By contrast, if the mortgage had been signed last December when Euribor was −0.502%, and all other terms remained unchanged, the monthly payment would have been about 100 euros lower, resulting in roughly 536 euros per month at that time.
The price of money in the euro area recently rose after the European Central Bank (ECB) increased its key rate by 0.5 percentage points on July 21, bringing it to 0.5% in an effort to curb inflation, which reached a recent peak around 8.9% in the eurozone. This adjustment mirrors actions taken by other major central banks as inflation remains a global concern.
The ECB moved in step with similar moves by the Federal Reserve, which raised interest rates by 0.75 percentage points in late July, pushing the target range to between 2.25% and 2.75%. In the United States, inflation has shown some softening, but prices remain elevated, underscoring ongoing monetary policy tightening across key economies—measures that influence lending costs worldwide.
The broader tightening of monetary policy is aimed at cooling inflation and dampening demand. It follows a surge in energy and food prices amid the ongoing effects of geopolitical tensions, including disruptions tied to the war in Ukraine. Supply constraints remain a factor, with continued concerns about global supply chains and the aftereffects of restrictive measures in various regions.
In addition to policy movements, market participants are watching global demand and production dynamics. News around energy costs, commodity markets, and consumer sentiment all feed into expectations for Euribor and the potential path of mortgage payments in the coming months.