The reference index most used in Europe to calculate the installments of variable rate mortgages, the one-year Euribor, breaks its upward trend by falling its average value by more than a tenth in November, to 4.022%, which represents its second monthly drop of the year. The decrease, of 0.138 points, distances the predictions that placed it at around 4.5% in December, after October marked its highest average value since November 2008.
Mortgaged companies can face the final stretch of the year with some relief, since the average figure for the index is the lowest recorded since June (4,007%), and its daily value has even been below 4% on three occasions this month. Despite this, Simone Colombelli, director of Mortgages at iAhorro, is cautious about making overly optimistic predictions. “This trend is striking, but we should not get carried away,” he warns.
Left behind, however, are the strong increases experienced since the spring of 2022, a trend that has given way to variations of one tenth month by month, up or down. This has occurred, in part, due to the stabilization of official interest rates, since in its last meeting the European Central Bank (ECB) decided to keep them at 4.5%.
The bad news is that the decrease in the Euribor will not translate for the moment into a lowering of variable rate mortgages with annual review, which is explained because in November 2022 the index was 1,194 points below the current level, in specifically at 2.828%. So, for example, whoever took out a variable mortgage of 150,000 euros in 2021, when the Euribor was negative, for 30 years and with a differential of 0.99%, paid an initial payment of 448.98 euros per month. An amount that in October 2022 increased to 691.35 euros and will now increase to 790.21 euros.
The accumulated increase in the last two, therefore, exceeds 340 euros per month. It must be remembered, however, that at the beginning of the life of a mortgage is when more interest is paid in proportion to the amortized capital, so the rise in the Euribor will have a lesser impact on those who have little left to finish the mortgage. return the loan.
The positive reading is that if the incipient downward trend in the Euribor continues and the index falls in December to 3.8%, “it will mean the first relief in two years for those mortgaged who are due for a semiannual review,” they comment from the Association of Financial Users (Asufin). The reason is that the index would remain below the 4.007% it marked in June, a decrease that would be slightly noticeable in the quotas.
The association recalls that “the unusual” rise in the Euribor in a year and a half, a period in which it has increased more than four points, has put stress on the mortgage market. Proof of this is the strong decline that has occurred in home sales in recent months.
