When data for the last day of the month is missing, Euribor is expected to end May with a monthly average around 3.86 percent, the highest level since November 2008. This marks an increase of 0.1 percentage point versus April and a substantial 3.57 points compared to May of the previous year. Despite the slower pace of the rise, this matters for people who need to review their mortgage installments tied to the living costs inside Spain, signaling a notable climb in monthly payments for those examining loan data in May.
Mortgage installments rise as Euribor remains higher than a year ago on the month used to review loans. The May level implies a mortgage of 140,000 euros over 25 years with Euribor plus 1 percent requiring a revision when new data is released, typically in July. This translates to about 260 euros more per month, up to 806 euros, and roughly 3,130 euros more per year, up to 9,672 euros. For a credit of 300,000 euros with the same terms, the increase would be about 559 euros per month and 6,708 euros per year, climbing to 1,729 euros monthly and 20,748 euros yearly respectively.
Euribor, which measures in theory the average rate at which banks lend to each other, has seen an unprecedented rise since the start of last year. The index aims to anticipate the actions of the European Central Bank, which raised its reference rates from 0 percent to 3.75 percent after tightening to combat inflation. The central bank has signaled further increases before a possible end to the tightening cycle. Markets are pricing in more than a quarter-point rise in June and another in July, suggesting that Euribor could move above 4 percent in the near future.
rising quotas
Even with the slowdown in the pace of increases, quota adjustments are expected to persist in the coming months and may soften in the latter half of the year. The review of loans hinges on Euribor’s level compared with the same month a year earlier, and variances of more than three points have become noticeable since last November, with September serving as the reference month for Euribor. The period through mid-year should see comparisons with the highs recorded at the end of last year, which would sustain higher quota increases in a smoother fashion for borrowers.
Euribor up a tenth: closed May at 3.86%, but refuses to reach 4%
The Euribor curve shows signs of stabilizing after months of movement, a pattern that many mortgage advisors view as a positive signal for the near term. This variable rate reference continues to influence mortgage terms over the coming months. Those with mortgages are advised to explore possible options and consider arranging a consultation with their bank to review potential solutions for their situation. Many institutions remain open to debt restructuring for customers who seek help before delays begin to mount.
The rise in official and market interest rates affects not only existing mortgages but also new home loans. An average new mortgage rate around 3.54 percent in March marks the highest level since April 2012, showing a sharp jump from 1.54 percent a year earlier. This underscores how lenders and borrowers are navigating a higher-rate environment as they plan new home purchases.