Euribor ends the month at 2.7% and saves €124 on mortgages that renew in November.

124 euros savings on mortgage payments every month. About 1,500 euros less per year – always on average. The Euribor rate closed the month at 2.69% after its biggest monthly fall in almost 15 years (the seventh in a row) and provides another big relief to the pockets of families with loans that are renewed in November.

The reduction in interest rates by the European Central Bank (ECB), which has been translated into Euribor, reduces the suffocation suffered by many households, doubly affected by the increase in the cost of their variable mortgages – the majority in our country – and by inflation. Although the fall of Euribor leads to a paradox: it makes loans cheaper, but fuels already rapidly growing housing prices.

As the graph of this information shows, just a year ago the Euribor rate was above 4%. It is currently at its lowest level in two years “and is on track to reach 2.5% later this year; or even lower,” says Mikel Riera, an analyst at online comparator HelpMyCash.

Namely, in October 2023, Euribor closed at an average of 4.16%. Nearly 1.5 points above the average mortgage index for the same month in 2024. This significant drop represents a reduction of approximately €1,500 for a variable loan, which is renegotiated every 12 months, of €150,000, up to 25 years and with a difference of one point plus the Euribor rate.

For the same example, but updated every six months, the discount is slightly smaller – 500 euros for the whole semester, 84 euros for each monthly payment, since the check will be carried out in November regarding the Euribor rate. 3.7%.

“Given what we are seeing, especially in recent days, we can say that we are experiencing a golden final quarter for mortgage holders. In October, Euribor recorded daily data at around 2.5%, something we have not seen in just two years (October 2022), when the trend was completely opposite as the market suffered,” notes Simone Colombelli, an expert from another comparator. , I’m Horro.

“Also, banks are now making very good offers on the best profiles: fixed mortgages that are very close to 2% NIR and mixed mortgages below this interest rate,” he adds.

In the middle of the month, the ECB decided to cut interest rates by 0.25 points, leaving the main benchmark at 3.25% (the deposit line, which is automatically transferred to Euribor). This is the third fall in the official “price” since June, driven by slowing inflation in the eurozone as a whole and breathing oxygen into the economy, especially due to stagnation in Germany and weak growth in France.

Inflation at ECB target of 2%

“The process of disinflation is in full swing,” the Governing Council of the ECB noted in its statement on October 17. In October, the consumer price index remained at 2% in the eurozone as a whole and at 1.8% in our country. Additionally, in the routine post-decision press conference, the institution’s president, Christine Lagarde, noted “weaker-than-expected economic activity,” mainly in the industrial sector, and also cited lower household spending or slower job creation.

With “downside risks” due to threats of declining trust between companies and families, as well as the impact of Israel’s genocide on the Palestinian people in the Gaza Strip, as well as its attacks on Lebanon. Although the Frenchwoman wanted to clarify that economic growth is not the main concern of the ECB, since its mandate is price stability. At the macroeconomic level, Spain is a positive exception.

Activity in our country continues to grow at a high rate. According to the INE (National Institute of Statistics) this Wednesday, GDP (gross domestic product) grew by 0.8% in the summer compared to the second quarter.

On October 22, the IMF (International Monetary Fund) revised Spain’s forecast for 2024 up half a point, to 2.9%, confirming that our country is a leader among the world’s major economies. This forecast may not come true again. “Given the improvement in activity until September, growth prospects for the Spanish economy in 2024 could reach 3%, above the estimated eurozone average of 0.8%,” admits the main business association CEOE.

In summer, the important contribution of private consumption stands out against the backdrop of moderate inflation. The increase in family spending amounted to 2.8% year on year and is “supported by the increase in the purchasing power of workers, which increased by more than one point last year, as well as the positive dynamics of employment,” as defended by the Ministry of Economy.