This small relief won’t disappear. While Euribor has recently dipped, the decline has been modest in the past month. A homeowner planning to review their mortgage this month might see a rate drop from 4.19% to 4.073%, yet the monthly payment could still rise significantly, as the landing does not perfectly offset the broader movements in the index. The sharp increases observed over the last six months or the past year mark the times when this operation is most common.
If the average mortgage for buying a home in Alicante is around €105,000 with a 25-year term, February reviewers may face payments nearly €33 higher on average—about €618.10 per month. Those who completed an August review last year could see increases up to €160. Without the August data, the rise would have been about €6 more per month.
Experts remain split on whether Euribor has peaked. Still, it is reasonable to expect another uptick at least into early next year for anyone navigating this process. The general expectation is that rates stay near their current level through 2024, then settle into a plateau with limited fluctuations, similar to what occurred in April.
“The key point is what happens at the meeting on September 14: will the ECB raise the official rate again by a quarter point, or hold steady? If it rises, Euribor could reach 4.3%; if not, it may stay between 3.5% and 4%,” explains a market analyst from a savings portal. In any case, the path after this peak is not a steep descent but a plateau with modest fluctuations for a period.
In other words, borrowers continue to face the effort of keeping up with loan payments. The cumulative increases since December 2021, roughly Euribor minus 0.502 percentage points, have pushed the average monthly mortgage payment in the region from about €372 to around €618, a rise of €246 monthly and roughly €2,950 more per year.
This is a sizable sum when the average declared salary in the region is only around €17,649, a figure reported by the national tax authority and among the lower levels in the country.
guilt
Yet the latest statistics from the central bank show that mortgage defaults have declined. In June, the default rate stood at 3.5%, which is 0.38 percentage points lower than a year earlier. This trend isn’t surprising given the wage and employment dynamics.
Asufin, a financial users association, notes several reasons behind this situation. Many families are taking advantage of savings built up during the pandemic to pay down loans and reduce monthly payments. At the same time, after the previous crisis, lending criteria became more conservative, with loans tied closely to actual solvency rather than boom-period expectations.
Above all, industry voices stress that the job market remains resilient and there have been no significant job losses, which is a major factor in keeping delinquency lower.
The decline in mortgage lending rates in Alicante eased in April
Verónica Rodríguez also cautions about the impact of reduced purchasing power on families. When households request new loans, ongoing living costs and other expenses can push indebtedness higher, creating new financial stress. In this context, Rodríguez advises considering traditional consumer loans before turning to credit cards, whose interest rates tend to be higher.