The year began with a January that maintained the Euribor drops that began in November 2023, but the relief ended soon, as February returned to the fray with new increases. However, many variable and mixed mortgages have been able to experience reductions in their installments.
Now that March has persisted with this bullish behavior of the Euribor, what is the future of mortgages? Is there anything to worry about?
The Euribor closed the month of March with an increase of 0.047% compared to the previous month, which leaves an average of 3.718%, a value very similar to that of the same period a year before: 3.647%. From that date on, the Euribor continued to increase until reaching its peak in October, a practice that will not be repeated this time.
“From April to June the Euribor will remain stable between 3.5% and 3.75%,” predicts Joan Balasch, operations manager at Housfy Hipotecas. It would be a first quarter of containment that would lead to a gradual decrease but it continues, until we are able to end the year with values ??between 3.15% and 3.35%.
This is good news for those who have a variable or mixed mortgage. Only the owners of these that have the semiannual review have been able to experience reductions in their installments, therefore, the fact that the Euribor will decrease throughout 2024, and by values ??lower than those of the previous year, will mean that more and more owners will be able to benefit from these reductions, even those who have an annual review.
The European Central Bank (ECB) met just five days ago to communicate its decision regarding interest rates: it will maintain them again at 4.5%, the same value since September 2023.
Now, the financial sector predicts a near drop in rates in June, so banks have already been anticipating for a few months and offering mortgages at an interest rate lower than the value of the Euribor.
This fact can trigger a rebound effect, and if the time comes the ECB backs down and maintains or increases interest rates, the Euribor will rise, since it was not the market’s forecast and the market will have to correct its current offers upwards. Consequently, the installments of all variable mortgages, and the new fixed and mixed mortgages established from this moment on, will increase.
Looking ahead to next year, predictions suggest that the Euribor will continue with the downward trend, and may even reach negative values, as happened in the period from 2016 to 2022. Although there is no floor for this reduction, it is expected that “The drop will be much less pronounced, and the Euribor will be between 2.30% and 2.80%,” says Balasch.
However, it goes without saying that we are in a very changing economic scenario, which is why it is very difficult to make firm estimates for such a long term, during which any exceptional event could occur that would hinder this assumption.
The same occurs with the landscape of 2026, which is marked by current uncertainty, but in the face of which Housfy’s Operations Manager, Joan Balasch, is betting on “a conservative scenario that follows the expected trend for 2025, with a Euribor that will be around in 2% or 2.5%”.