Closing of the June Euribor rate is a joy for mortgage holders – Idealista/news
The 12-month Euribor rate recorded a fall for the third month in a row. The benchmark for most mortgages in Spain ended June with a preliminary average of 3.65%, down from 3.68% in May and 3.703% recorded in April. This is the lowest figure since January.
The new cut coincides with the interest rate cut announced by the European Central Bank (ECB) in early June, the first in the eurozone since 2016, and will bring with it reduction in variable mortgage payments which will be considered in the near future. However, the savings will be moderate.
For an average mortgage, the savings will be around €30-32 per month (around €360-380 per year) in the case of an annual review (last year, Euribor closed above 4% in June); and in the case of semi-annual reviews, they will be lower, around €3 per month (around €36 per year).
The good news is that Euribor is pointing to further declines. after already accumulating five sessions with a daily rate of less than 3.6%. On the last working day of June it was 3.578%.
More falls, but not significant
Experts hope further reduction of the 12-month Euribor rate in the short term, but without significant changes for the rest of the exercise. The reason is that the market is currently discounting the fact that the European Central Bank (ECB) will maintain contractionary monetary policy and will therefore announce one to two additional money price cuts before December.
This new scenario has already seen analysts update their Euribor forecasts, such as those at Bankinter. As the financial institution’s research team predicts in its latest market report, At the end of 2024, the 12-month Euribor rate will remain at 3.5%. (at the level of the previous year -3.5%- and only two tenths below the current level) and that will fall by half a point in 2025until it reaches 3% in December of the same year. Looking ahead to 2026, he already sees a rebound and believes it could reach 3.25%.
New Bankinter Euribor forecasts draw worse scenario than bank analysts expected the captain is Gloria Ortiz. Until now, they expected the 12-month Euribor rate to end 2024 at 3.25% and fall another half-point in 2025, to 2.75%.
The bank’s current calculations suggest a jug of cold water for thousands of mortgaged people, which expected the start of interest rate cuts by the European Central Bank (ECB) to lead to a noticeable reduction in variable loan repayments at the time of review, following modest declines achieved in recent months. However, this is not the scenario that experts predict.
Apart from Bankinter, there are several forecasts according to which Euribor will fall by just a few tenths in the coming months. Ebery, a Fintech company specializing in international payments and foreign exchange for SMEs controlled by Banco Santander, estimates that Euribor could be around 3%-3.5% at the end of the year. Meanwhile, Funcas Panel (according to experts collected by the Savings Bank Fund) the lower limit of the indicator this year is 3.2%, and in 2025 – 2.75%; And BBVA Researchat 3.3%.
Therefore, as explained Juan Villen, CEO of Idealista/mortgages, delay in interest rate reduction “will delay the downward revision of variable mortgage payments, while the situation is better for those families looking for a mortgage loan at the moment, as competition between institutions has led to a narrowing of spreads on new mortgages at the beginning of the year, and the same trend can be foreseen to continue in the future. the rest of the year.
On the same line Association of Financial Users (ASUFIN) indicates that the decline in mortgage repayments “will become more intense as the year progresses,” especially between July and October, when the Euribor rate exceeded 4.1%.