Euribor continues to rise in the final period of the month and threatens to close at 2.5%.
Euribor, the index to which most variable mortgages are linked, represents this Thursday, November 28, 2024 another rebound in the final stretch of the month, just one day before the end of November. Thus, it is at the level of 2.463%, thereby breaking the downward trend that has been very noticeable in recent days, when the daily rate even fell below the 2.4% barrier.
Thus, the preliminary monthly average for November 2024 is now 2.507%.and there is one day left to find out the exact information that will affect the pending mortgage payments. In fact, for the first time in two years, the monthly Euribor rate was expected to fall by 2.5%, something that has not happened since September 2024, but this figure could remain at this level or higher, given the new rebound this Wednesday and this Thursday.
As for the daily data, the mortgage lending index increased by 0.015 after another increase the day before. We will therefore have to wait until tomorrow to find out what the final closure of Euribor will be. Be that as it may, it goes without saying that the monthly decline is already consolidating. it has fallen for the eighth month in a row.
How long will the Euribor rate reduction continue?
As 2024 draws to a close, we are already looking ahead to 2025, when many are wondering what will happen to the mortgage index and the premiums that need to be paid. At the moment, the ongoing cuts of the European Central Bank (ECB), as well as expert forecasts, They make us think that the decline will continue at the same rate. than in recent months, at least until June 2025.
In fact, these persistent falls in the daily rate and the ECB’s discounted meeting rate cuts are lowering analysts’ forecasts. For now, Funcas, which gathers the opinions of 19 of the country’s most prestigious economics firms, such as banking or university research services, in its economic forecasting group, is gathering consensus on how Euribor will develop in the coming quarters. For the second quarter of 2025, it targets an average of 2.46%, while it has already lowered its forecasts for the end of the year and In the fourth quarter, he already points to an average of 2.35%.
But what do the people themselves say? EURIBOR futures? Euribor is formed on the basis of interbank loans that large financial institutions in Europe provide to each other, but at the same time it is also quoted on financial markets through financial futures. The most common term is three months, and its contracts are usually interpreted as a good indicator of what Euribor investors are expecting. Although a few weeks ago they were placed in 2.06%subsequent data went further and placed the December 2025 contract at 1.93%. Now the latest data suggests December 2025 futures. 1.85%.
How will this affect my mortgage?
The downward trend experienced by Euribor directly affects mortgage reviewsboth semi-annually and 12-monthly, as banks restate variable mortgages with monthly averages rising or falling from six or twelve months ago.
To see this with an example, for a mortgage of €140,000 for a term of 30 years (360 months) with a difference of 1% and taking November 2023 as a reference (as most mortgages are reviewed after 12 months), when the Euribor rate closed at level 4.022%, The monthly fee was 753.43 euros.
Now that the preliminary average rate for November 2024 is 2.5%, mortgage payments for homeowners who have a review in September will fall to 601.02which means that They will pay 152.41 euros less than a year ago. and the first drops in monthly mortgage payments will begin to be noticed.
How is Euribor calculated?
Euribor corresponds to the name “European Interbank Offered Rate” and is calculated by a group of European banks that report every day at what rate they issue interbank loans. Since 2020, settlements have been carried out using a hybrid method. Includes panel data as well as proprietary market estimates to reduce volatility and risk of manipulation. to which these indices were subjected at the beginning of the century.
The panel includes 18 European banks.among which are Santander, BBVA, Barclays, Deutsche Bank or Unicredit.
Every business day at eleven in the morning the average interest rate at which financial institutions lend capital to each other is published. one week, one month, three months, six months and 12 months.
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