The Euribor today rises to 3.735%. There are three days left until the month of February ends and the majority of mortgage holders who have to renew their credit this second month of the year have already made calculations of how much their payment will increase because the average is around 3.66%, a higher figure to 3.53% from a year ago. Only mortgages that renew semiannually will notice a reduction in the price of the note. Today is not a day of joy for those who renew with the March date either. For now, the average is still above the following month (3,647%). Bad news in general for those who expected mortgage relief on their monthly expenses in the first quarter of the year. The only good news for everyone will be that they will not have to face large increases in the fee – some in 2023 noticed an increase of 600 euros per month.
How much will my mortgage increase in February?
Translated into how much more or less bank clients will have to pay, those who have an annual review of a typical 30-year mortgage with Euribor plus 0.99% will face a fee increase of about 84 euros per year if we are talking about a mortgage average of 150,000 euros -7 euros per month-. Those who will notice a decrease will be those who renew semi-annually.
Under the same mortgage conditions as the previous one, the reduction is around 45 euros per month, just over 500 euros per year. If the mortgage is 300,000 euros, in this case the reduction will reach 87 euros per month, more than 1,000 euros per year. In the case of an annual review, you will have to pay 14 euros more per month, 168 euros per year. According to the Bank of Spain, a notable general decline will arrive in the month of March.
How are you?
The Euribor (in English, Euro Interbank Offered Rate) is a market reference interest rate without guarantees for different maturity periods (one week and one, three, six and twelve months). The Euribor is calculated by the EMMI. This institution defines the Euribor as “the interest rate at which credit institutions from countries belonging (or formerly belonging) to the European Union and the European Free Trade Association can finance themselves in the wholesale market without guarantees.”
When will the ECB lower rates?
The ECB, ‘guardian of the euro’, had raised rates by 450 basis points during the hike cycle, which began in July 2022, although now the markets are betting that the ECB will lower the reference rate, something that could happen This summer, as analysts deduce from Christine Lagarde’s latest statements.
Increases a year ago of up to 600 euros per month
The year 2021 was one of the best to get a mortgage: the Euribor registered its historical minimum values (-0.505 in January and -0.502% in December of that year) and mortgage firms in Spain registered figures never seen before, up to 418,058 operations throughout the year, 23.7% more than in 2020, according to data provided by the National Institute of Statistics (INE). And, although it seemed that 2022 was going to follow the same path, the war between Russia and Ukraine, which began in February of that year, caused the Euribor and inflation in the eurozone to begin to rise significantly, marking a turning point. later in the sector. After a year with letters that have risen to 600 euros, the revisions now move away from those figures.
So much so that the reference index of mortgage variables registered positive values again in April 2022 (0.013%), after spending more than six years in negative values. This affected all those with variable rate mortgages who had to review their mortgage payment upwards from that moment on. These increases were initially between 30 and 60 euros per month, but the Euribor continued to rise until the end of 2022 at 3.018%, which caused mortgage holders who reviewed their mortgage in December to see their monthly payment rise. in some cases, up to 600 euros each month.
And that was not all. In 2023 THE SIGUILAI EURIBOR rises, reaching its highest peak of 15,160% in October of that year, a figure that placed up to 4,662 PURCENTUAL POINTS AT THE TOP OF THE REGISTERED IN DECEMBER 2021. Therefore, explains the Mortgage Director of the comparator and iAhorro mortgage advisor, Simone Colombelli, “those who took out a variable mortgage when the Euribor was negative have been the most affected by the rise in this indicator, since they have seen how their monthly payment has almost doubled in just two years due to the increase in the interest they pay to the bank.”
What will happen to the Euroíbor in 2024?
The Euribor ended 2023 confirming its downward trend, so this year 2024 we are already seeing the first fee reductions in variable mortgages with semiannual review. For example, who signed a mortgage in January 2021 with a semi-annual review of 150,000 euros for 30 years with a Euribor + 0.99% differential, will have already experienced this in January of this year (month in which the Euribor closed at 3.609%). a drop of 47.87 euros per month in your fee, from the 787.16 euros per month you paid to 739.29 euros now.
However, to see these reductions in mortgages with annual review we will still have to wait a little, although perhaps not too long. “If the Euribor falls, even by one tenth, this February compared to the January figure, we could already see lower installments on mortgages with annual review this month. But it would have to end up below the 3.534% that the indicator registered at the end of February 2023,” says the iAhorro spokesperson.
For example, if the Euribor ends this month of February 2024 around 3.558% on average, whoever signed a mortgage in February 2021 with an annual review will still see their fee increase by 1.93 euros. It is true that this increase no longer represents a big change for the mortgaged, but it will delay the reduction in installments at least until February 2025. However, if it ends, for example, at 3.5%, the mortgaged would already experience a drop of 2.72 euros in your quota, up to 736.91 euros.
When will mortgages go down according to experts
Of course, Simone Colombelli assures that “it will not be until after the summer when we will see substantial decreases in the installments of variable rate mortgagees with annual review because we do not expect the Euribor to drop noticeably until then.” Of course, this depends on the European Central Bank (ECB) then lowering official interest rates (they are now at 4.5%), as its president, Christine Lagarde, recently announced. If this happens, adds the Mortgage Director of the iAhorro mortgage comparator and advisor, “mortgagors who have to do the annual review of their installment starting in June or July will already see drops of more than double digits in their monthly installments.”
