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HomeLatest NewsThe Euribor closes January overexcited at 3.41% before the ECB rate hit

The Euribor closes January overexcited at 3.41% before the ECB rate hit

Date: March 29, 2024 Time: 12:25:20

The 12-month Euribor, the reference for variable-rate mortgages, was quoted this Tuesday at 3.415% and closes the monthly average for January at 3.337%, a figure that will be ratified by the Bank of Spain this week for its subsequent publication in the Official State Gazette (BOE). In both cases it continues to be the highest level of the interbank index since December 2008, when it stood at 3.45%.

The daily price of the Euribor has remained stagnant throughout the month, slightly above 3.3% and only on January 31 has it broken out of the range. Wholesale financing has thus adjusted at the last minute to the imminent rise in interest rates by the European Central Bank (ECB), which this coming Thursday will raise the rate by 50 basis points, from 2.5% to 3%.

The ECB increased its three interest rates by 50 basis points on December 15 due to the persistence of high inflation, but also guided the market with the message of at least two additional increases of the same amount, with which it could situate its rates at 3.5% as of March. For now, the consensus of economists foresees that this Thursday it will take them to 3%.

The 12-month Euribor index, a reference in variable-rate mortgages in Spain, has risen 381 basis points in the last twelve months, which will result in the highest price increase in history for payments for this type of loan. Despite this, although with somewhat delayed data, economic authorities such as the Government and the Bank of Spain have downplayed the impact they will have on credit health.

For a standard loan of 100,000 euros for 25 years of recent constitution and with a differential of one point, the fee to be paid will rise from 355 euros to 546 euros this month, about 2,300 euros more per year. With the same conditions for a mortgage of 200,000 euros, the fee will go from 711 to 1,093 euros with this month’s review, about 4,600 euros more per year. If the loan is 300,000, the calculator tells us that the monthly letter will rise from 1,070 to 1,639 euros, around 6,800 euros per year. There are factors such as the age of the mortgage that cushion the impact of the increase in interest.

Mortgage production is falling

According to data from the Spanish Mortgage Association (AHE), mortgage financing has continued to increase its level of activity throughout the third quarter of 2022, despite timid signs of a slowdown in a context of downward expectations in economic activity and higher prices. of financing. In the third quarter of 2022, 152,228 operations were established for a value of 24,040 million euros, 4.7% year-on-year and 13.2% more, respectively.

“Both rates maintain the advance, but soften the strong expansion observed in previous quarters. On the contrary, in quarterly terms, both magnitudes (number of operations and volume) registered a contraction close to 3.5%, although it should be remembered that it is compared to a quarter where financing broke records”, he explains.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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