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HomeLatest NewsThe Euribor will close July with the average at 4.15% after the...

The Euribor will close July with the average at 4.15% after the nineteenth monthly rise

Date: July 24, 2024 Time: 06:19:29

One peel up. In the absence of the data for Monday, July 31, the 12-month Euribor, the interbank wholesale financing index and reference for mortgages, will close July with a monthly average of 4.156%, 0.149 basis points more than in June (4.007%) and 315 basis points more than in the same month of 2022, according to data consulted by ‘La Información’. This is the nineteenth consecutive rise in monthly averages, which is the one that acts as the majority reference for calculating the cost of variable-rate housing loans.

The index will complete the series of data for the month, which will be made official next week, after the reaction to the latest rise in interest rates that the European Central Bank (ECB) will change yesterday. The monetary authority raised the main rate by 25 basis points, from 4% to 4.25%, its highest level since September 2008.

The 12-month Euribor fell slightly this Friday to 4.111% from 4.14% on Thursday. The monthly average in the absence of Monday’s data stands at 4.156%, the highest interest rate for the indicator since November 2008 in the midst of the financial crisis.

The ECB’s new rate increase will take effect on August 2, according to the agency, which also left the door open for a pause in the rate tightening cycle at its meeting on September 14. This could open a period of stabilization of the Euribor until then.

In fact, a growing number of economists consider that Christine Lagarde has put the current cycle to the rise in the price of money this week and that from now on she will focus on adjusting other tools such as reducing her portfolio of on-balance bonds, which also It implies a more restrictive monetary policy.

Increase of 3,000 euros more per year

The impact on financing costs will again be significant for those reviewing their financing this month. For a standard loan of 150,000 euros for 25 years, with a differential of 1 point over Euribor, the fee goes from 635 to 890 euros per month, 255 euros more per month or an additional 3,000 euros for the next 12 months.

Since it set its monthly record low of around -0.5%, newly granted variable-rate mortgages have become more expensive by 4,030 euros per year according to the same parameters. Since its daily minimum in December 2021, the 1-year Euribor has risen to 470 basis points if the annual maximum set by the index on the day of July 12 at 4.191% is taken as a reference.

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

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