The Euribor today rises to 3.756%. This daily data is bad news for a large part of mortgage holders who have to renew their mortgage payment in the month of March. The rest have to cross out this month on the calendar after the vice president of the European Central Bank (ECB), Luis de Guindos, advances that the entity will be able to “more appropriately” assess its future monetary policy decisions in the meeting it will hold. Next June.
The path of the Euribor this month for now makes mortgages more expensive since the average, 3.728%, remains above that set last year (3.647%). The month of February already marked the first increase in the indicator to which most mortgages in Spain refer in months and March continues for now the same path, making mortgages that are renewed annually more expensive.
For now, the only ones that will go down will be the semi-annual reviews and some will do so by more than 900 euros per year. On the horizon, the announcement by the European Central Bank to study a reduction in interest rates soon. Until it arrives, mortgage holders will have to face a new increase, not as high as a year ago when some mortgage holders suddenly paid up to 600 euros more per month.
How much does the mortgage go up if it is an annual review?
From iAhorro they have made the calculations of how the March Euribor will affect the reviews of annual variable mortgages. In the case of a 30-year mortgage with Euribor plus a differential of 0.99%, the annual increase is 85 euros if we are talking about 150,000 euros. If the mortgage is double, it rises to 170 euros per year -14.23 euros per month.
How much does a mortgage go down if it is reviewed semiannually?
As we said before, the only ones who will be happy for now will be those who renew their mortgage with a semiannual review. In the case of a mortgage of 150,000 euros, you save 40 euros per month, up to 480 per year. If it is double, they stop paying 80 euros per month, up to 962 euros per year.
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.”
Is the ECB going to lower rates?
The most anticipated day for mortgage holders was last March 7, when the European Central Bank (ECB) announced that it was keeping rates at 4.5%. Thus he fulfilled all the predictions. According to Welcome Asset Management senior associate Fernando Gómez de Barreda, everything indicated that rates will remain at current levels but he indicated to be attentive to the president of the ECB, Christine Lagarde, in case she advanced any position on the decisions that will be taken in the next meetings. Bank of America’s chief European economist Rubén Segura-Cayuela noted that the ECB is not yet ready to make a firm commitment to lowering rates, but was likely to put a “soft guidance” on the table in the sense that it would already rate cuts are almost going to happen. So it was. The sales will come, but you have to wait a few months.
When will the Euribor drop according to experts?
Given these data… Should we be alarmed? “The Euribor is a volatile indicator and that it rises or falls a little each month is to be expected. What we do not expect is that it will once again rise above the 4% barrier or that it will suddenly drop to levels closer to 3%; This would not be logical unless an unexpected macroeconomic change occurs (a war, a pandemic, a drop in official interest rates…)”, explains Simone Colombelli, mortgage director of the comparator iAhorro.
Colombelli also adds that, “despite the fact that the Euribor has risen slightly, if we look at its long-term evolution, we are still in a moment of stability within the decline that this indicator is expected to register.” The positive fact is that, despite the Euribor having closed the month higher, banks maintain the trend of the previous month, that is, stability or improvement in the interest rates on their mortgage products.
Best fixed rate mortgages for March
In fact, as far as fixed rate loans are concerned, more and more entities are offering a mortgage with a fixed TIN below 3%. Sabadell has one of the best fixed mortgages at the moment. It offers a TIN of 2.80% and an APR of 3.92%. Taking as an example a fixed mortgage of 200,000 euros for 30 years, the fee that a user would pay would be about 821 euros per month. All this in exchange for direct deposit of the payroll or pension and acquiring three insurance policies (home, life and payment protection).
Santander also markets a fixed mortgage with the same TIN as Sabadell: 2.80%. In this case the APR is 3.39%. Regarding the links, it will be necessary to domiciliate the payroll, pension or self-employed payment; use the credit card up to six times; take out four insurance policies (home, life, accidents and disability); have the renting of a security system from Movistar Prosegur Alarmas and have a home with an A+, A or B energy efficiency certificate.
Nor should we forget about EVO. By direct debiting the payroll, unemployment benefit or pension of more than 600 euros and taking out two insurance policies (home and life insurance), the TIN of your fixed mortgage remains at 2.90%. Therefore, following the previous example, a person who signs this mortgage will pay a monthly payment of about 832 euros.
The best mixed mortgages of March.
Although some entities have improved the conditions of their fixed mortgages, the truth is that mixed mortgages remain the solution for those users who want a fixed payment, but with a lower TIN.
Abanca’s mixed mortgage has a mixed mortgage in which for the first five years the future owner will pay a fixed TIN of 2.50%. This translates into a monthly payment of about 790 euros per month if financing of 200,000 euros for 30 years is purchased. In exchange, it will be necessary to domiciliate the payroll, make 24 purchases a year with the entity’s credit card and take out two insurance policies (life and home). Ibercaja, for its part, has a 10-year mixed mortgage. This means that, during that decade, the fixed TIN will be 2.55% which, following the case exposed with Abanca, translates into a monthly payment of about 795 euros.
Best variable mortgages of March
In the case of mortgages this principle can be applied. If a person prefers to opt for a variable mortgage, there are attractive options to consider. One of them is EVO. Your variable mortgage is made up of a TIN of Euribor +0.48% (2.30% during the first two years) and an APR of 4.26%. The requirements that must be met in this case are payroll direct debit, unemployment benefit or pension of more than 600 euros and taking out home insurance.
Kutxabank follows a similar line. The TIN of your variable mortgage is Euribor +0.49% (2.53% during the first year) and the APR is 4.38%. If a person wants to contract this loan, they will have to accept the following conditions: domiciliate the payroll of the holders (amount equal to or greater than 3,000 euros per month), make an annual contribution to Kutxabank pension plans of imports equal to or greater than 2,400 euros and contract home insurance.
