The 12-month Euribor, the indicator most used to calculate variable mortgages in Spain, closes April with an average rate of 3.703%, slightly lower than that of March (3.718) but 0.032 points above that of February. Despite this, this is the first time since December 2021 that the monthly review of the Euribor makes this type of credit cheaper by registering its first decline in the interannual rate.
As a consequence, those who will soon have to review their mortgage payments will benefit from a small reduction. Specifically, in the case of an average mortgage loan of 150,000 euros with a term of 25 years and an interest of 1% plus Euribor, the savings will be about 4.6 euros per month or almost 56 euros per year if the credit in 2023, since the change in the interest rate has much more impact on those mortgages with a few years of life.
The consumers who will notice the decrease the most are those with mortgage contracts that establish a semiannual review of the payment. Taking into account that the Euribor last October reached its maximum in 15 years at 4.160 and that since then it has dropped 0.457 points, the installment of a loan with the characteristics described above but with a semi-annual review would become cheaper by around 40 euros per month (477 euros per year).
The expectation of a rate cut by the European Central Bank (ECB) puts downward pressure on the indicator and opens the door to optimism of a significant reduction in the cost of this type of credit this year. “If interest rates continue this downward trend, as expected, the month of December will close at around 3%, which will mean a drop in monthly installments of just over 38 euros, and almost 460 euros per year”, predict the Association of Financial Users (Asufin).
For now, however, the decrease is slight “and does not compensate for the increases in mortgage prices that mortgage holders have suffered in the last two years,” says Simone Colombelli, director of Mortgages at iAhorro. Even so, he considers that it is positive for both mortgage clients. banking with variable loans as for the mortgage market in general.
However, HelpMyCash points out that the expectation of a sharp drop in the Euribor in the short term may be too optimistic. And they argue that the indicator is likely to remain relatively stable around 3.7% until June, the date on which the central bank is expected to change the course of its monetary policy and undertake the first rate cut since March 2016. Although ultimately it will depend on the evolution of inflation and economic growth in the euro zone.
