Euribor falls to lowest daily rate in two years
The annual Euribor rate, the indicator most used in Spain to calculate variable mortgages, fell below 2.7% daily rate this Monday and reached its lowest level since October 2022. This decline is caused by the prospect of a new reduction in interest rates in Europe to 3.25%, which will reduce installment payments on mortgage loans.
Euribor, which has declined for six sessions, is around its monthly average of 2.745% and could be lower. if the downward trend continues for the rest of October. If confirmed, this indicator will be seven months in a row down.
From October 31, 2022 ascension phase As a result, the index, which is used as a benchmark for most floating-rate loans contracted in Spain, peaked at 4.224% in mid-September 2023.
A year later, in September 2024, Euribor fell for the sixth month in a row and closed higher. monthly average 2.936%, lowest level in 21 months. If the European Central Bank (ECB) maintains its planned path of rate cuts, Euribor could end the year at around 2.5%, analysts say.
Mortgages may benefit
Since the Euribor rate was 4.16% a year ago in October 2023, mortgage holders will benefit from the next revision. For example, those with a mortgage of 150,000 euros for 25 years and with a differential of 1%. they will save about 120 euros per month in its annual review.
The fall in Euribor comes after the ECB’s Governing Council decided last Thursday to cut its benchmark interest rate by 25 basis points (a quarter of a point). This is the second decline in a row and the third this year.
From iAhorro they commented that as a result of the ECB’s rate cut, the fall will, however, “barely” impact mortgage supply as most banks have already adjusted their offers for the rest of the year.
“Banks are already paying balances in this final quarter of the year and are offering very aggressive interest rates on their mortgages that we haven’t seen since 2022. At iAhorro, our users are already signing fixed mortgages with an interest rate that is very close to 2% TIN and even some mixed mortgages with an initial fixed rate below 1% TIN,” Simone, director of the mortgage comparator, explained to Europa Press last week Colombelli.