Interest rates are rising and mortgages are not far behind. Just the day after the decision of the European Central Bank (ECB) to raise the price of money to 4.5%, the Euribor rallied until it returned to approaching the levels of July, which are, at in turn, the highest since the end of 2008.
In its daily indicator, the reference interest in mortgages was 4.169%, compared to 4.055% at the beginning of the month. It added five days to the rise, to the highest share since 4.174% on July 13. It is also close to the maximum in fifteen years marked on July 7, of 4.193%.
“In the coming months it will predictably draw a sawtooth curve, with ups and downs, although the forecast is that it will not reach more than 4.25% to stabilize between 3.75% and 4, 25%, and then begin a downward trend”, says Antonio Gallardo, head of studies for the Asufin banking users’ association.
In the monthly average so far in September, it is trading at 4.09%, above the 4.07% in August, but still below the 4.14% in July. The experts’ forecast is that in September, after this week’s interest rate hikes, August levels will be exceeded.
“The market interprets that it is the last rate hike, so the Euribor should not rise much more”, but there is still uncertainty, says Natalia Aguirre, an analyst at Renta 4. “We continue to live on data dependency”, he adds, alluding to the ECB’s strategy to act based on the data of each moment.
An average loan of 150,000 euros for 25 years with a differential of 1% has gone from having a fee of 565 euros before the start of interest rate increases to 885 euros today. The increase already exceeds 300 euros per month, according to the simulator of the Spanish Mortgage Association (AHE).
The AHE analyst Leyre López indicates that, with the current interest rates on loans, debt amortization among consumers is gaining momentum, as are mixed mortgages: the first ten years are at a fixed rate, and the rest at a variable rate. “With the current trend, the hiring of mixed mortgages has doubled and is already 30%, to the point where they exceed variable mortgages,” he says. Fixed rates are now around 45%.
Another possible effect of rate hikes is the fall in sales and the cheapening of housing prices. Since Asufin, Gallardo has indeed detected a decrease in the amount of the average mortgage. “Faced with the rise in financial costs, the most economical homes are being sought”, which are those that are being placed on the market at the fastest rate, which serves as an indication of possible future price reductions.
