all mortgages that will pay less in installments from February
He Euribor rate will rise today up to 3.537%. February continues mortgaged who update their mortgage loans in the first months of the year, congratulations. Pay less Because of the mortgage, this seems less and less like a dream and more like a reality, and today CaixaBank clients already know when they can start receiving their first discounts. Of course, so far only a part of those who have extended mortgage loan With the difference in January, they will notice a reduction in their mortgage. These are the ones that are updated every six months. The rest will pay more because Euribor closed January with an average of 3.6092% and we have to compare it with 3.337% a year ago. If Euribor continues to decline, every month there will be more people who will not only not pay more every month, but will also reduce their mortgage costs. According to the Bank of Spain, this noticeable drop will occur in March. February, in the first two days of the month, the average is still below what it was a year ago.
These are the first mortgages to go down
Thus, if the same variable mortgage of €150,000, concluded in January 2021 for 30 years with Euribor + differential of 0.99%, had a semi-annual review, then at the review in that month the premium would fall by €47.87 or, in other words, for the same amount. the mortgagee will pay this year is 574.48 euros less than last year. Likewise, if the mortgage capital were €300,000, under the same conditions the reduction would be greater: €95.75 each month and up to €1,148.96 over the course of a year.
Why will my mortgage go up in January?
Against, Mortgage banks will review their loans annually They will continue to see their quotas rise, as a year ago, in January 2023, Euribor was 3.337%. Thus, in the case of a mortgage of 150,000 euros for a term of 25 years and an interest rate of Euribor plus 1%, the installment plan will increase by approximately 24 euros per month or 288 euros per year.
Cause? During conclusion of a loan agreementIn January 2021, the Euribor index was negative and recorded one of the lowest levels in its history – -0.505%; The following year, in January 2022, this figure was -0.477%; In January 2023, it jumped to 3.337%, and now, although the increase is slowing, it is still higher than a year ago at 3.609%.
When will the ECB cut rates?
The ECB, the “guardian of the euro”, raised rates by 450 basis points during the hike cycle that began in July 2022, although markets are now betting that the E.C.B. reduce the base ratewhich could happen this summer, according to analysts’ conclusions from Christine Lagarde’s latest statements.
Euribor in February 2023
Behind Small increase Today’s Euribor rate, the monthly average that most mortgages in Spain are linked to, starts in February with an average monthly rate of 3.52%, after averaging 3.6% in January. If it’s time to update the average for the first month of the year, we shouldn’t forget that it closed 2022 at 3.3337%. Anything that exceeds this figure is reflected in the increase. It’s only two days so far, it stood at 3.53 in February 2023 and the current average is 3.52%.
When will the Euribor rate fall? Here’s what the experts say
Mortgage director of comparator iAhorro, Simone Colombelliexplained that the Euribor continues to decline, but is softening its decline following the sharp decline recorded at the end of 2023 and the stabilization of interest rates by the European Central Bank (ECB).
Likewise, a mortgage analyst at financial comparator HelpMyCash.com, Michael RieraHe explained that the slight decline in Euribor in January contrasts with the sharp decline that occurred in December, when, in his view, “the market became overly optimistic” about expectations of central bank rate cuts.” He now added, “forecasts have been brought into line with reality : There is no date planned for rate cuts.”
In December 2023, Riera explains, the market predicted a short-term ECB rate cut and Euribor experienced a rapid decline. However ECB recently assured that they do not have any timetable for cutting rates, since this decision will depend on GDP data and the evolution of inflation in the eurozone.
The forecast of comparator experts is that in the first quarter of 2024, Euribor will decline slightly and close at a level close to 3.5%. Therefore, the first APR variable mortgages to fall in price will likely be those that are updated to reflect the index’s March value (it was pegged at 3.647% for 2023).
But in most optimistic scenarioThey clarified that the Euribor rate, revised taking into account the February rate, may become cheaper (in 2023 it was quoted at 3.534%). Likewise, the Bank of Spain, in a report on the financial position of households and companies published this Wednesday, indicated that, starting in March and in line with current market expectations, annual reviews of mortgages linked to Euribor are expected to become lower. that is, families will see their monthly payment reduced.
General Director of RN Your Mortgage Solution, Ricardo Gulias, also highlighted that the mortgage situation in Spain continues to improve at the start of what could be a pivotal year for the property sector. Thus, Euribor, which has stabilized at 3.6% after peaking at 4.16% in October, is estimated to fall further and end the year at around 2%. However, he warned that the stability of mortgage terms was currently threatened by the military situation in the Red Sea.
Changing your mortgage this year is free
In the last week of 2023, the Government approved measures to mitigate the effects of inflation, one of the central points of which was mortgages. This revealed one of the most noticeable changes: an increase in the income threshold to qualify for measures Code of Best Practice. The new figure is €38,000 per year, a significant increase from the previous €29,500. In addition, early repayment fees for adjustable rate mortgages will continue to be waived throughout this year. Free subrogation of variable mortgages to fixed mortgages was also extended, and the option to convert to a mixed mortgage was added.
Is it the right time to subrogate your mortgage?
With 2024 starting with so much optimism in the banking industry, iAhorro Comparator Mortgage Director Simone Colombelli assures that “This will also be a good time for surrogacy because financial institutions are making their mortgage offerings cheaper, both at blended and fixed rates.” So, since the data recorded each month on average by Euribor is still higher than the interest rate offered by banks on fixed or mixed mortgages, those with adjustable rate mortgages “can still get a nice reduction your monthly payments.” they are changing their loan to a fixed or mixed rate loan,” he adds.
It is true that Euribor is not usually higher than the interest rates on fixed mortgages. But, concludes the comparator’s mortgage director, “at iAhorro we recorded an average fixed interest rate of 3.03% in December, a figure that is significantly lower than the Euribor for that month (3.679%), and even people with very good economic and labor income profile signed a fixed mortgage at 2.5% NIR in the last month of 2023.”