Euribor will fall to 2.936% in September and experts predict it will end the year at 2.5%.

Madrid/He Euribor to twelve months, the indicator most used to calculate variable mortgages, fell for a sixth straight month in September, closing at average rate 2.936%and experts predict that it will maintain a downward trajectory until the end of the year, when it may be about 2.5%.

According to market data compiled by EFE, Euribor fell to 2.936% in September from 3.166% in August and reached at lowest level since November 2022.

If we compare the data with data from a year ago, the indicator fell sharplyas it traded at 4.149% in September 2023.

This way, those who have to renegotiate their variable mortgage annually will benefit from savings in installments from 100 to 200 euros monthly.

Analyst Joaquin Robles attributes the fall in Euribor mainly to forecast for rate reduction.

Remember that the European Central Bank (ECB) cut interest rates by 25 basis points this month and says investors are already starting to discount more in the coming months (three to four cuts this year and four to six for 2025) , says the analyst.

Even, he adds, in recent sessions pressure on the organization for a new cut in October has increased following “an unexpected slowdown in inflation in September, as well as German weakness.”

In this regard, it is stated that The evolution of Euribor will continue to depend largely on ECB rate cuts.Eurozone growth prospects; and the evolution of inflation.

Finally, he predicts that Euribor will continue to fall in the coming months and that In the first half of 2025 it will range from 2% to 2.5%..

Director of mortgage comparator and mortgage advisor iAhorro Simone Colombelli emphasizes that the Euribor is falling faster and faster than expected” and that since July last year “there has been a clear turning point in the trend of the index, which has completely changed its course.

In this context, he believes that the indicator is in a very positive scenario, targeting 2%, a value that could reach, according to Colombelli, “in the second half of 2025.”

turn 180°

In turn, Mikel Riera, a mortgage analyst at the financial comparator HelpMyCash, points out that the Euribor rate, which exceeded 4% in the summer of 2023, gave turn 180 degreesin the context of the ECB rate cut.

The comparator therefore forecasts that Euribor could end the year in a range of 2.5% to 2.75%.

Likewise, analyst Manuel Pinto highlights that the ECB’s recent rate cuts and poor macroeconomic data in the region have pushed Euribor to its lowest level in 21 months.

In his opinion, the indicator will continue its downward trend in the coming weeks before reaching a level close to 2.5%, although he believes it will stabilize in the final months of the year amid current inflation risks.

“Global rate cuts, developments in the services sector, monetary stimulus in China and the comparative base effect of falling energy prices could lead to a new rise in inflation that will limit future central bank decisions, mainly in the case of the ECB. whose main goal is price stability,” he says.

However, the pressure that the Federal Reserve (Fed) could apply by cutting rates more aggressively could push the ECB to cut interest rates twice in the rest of the year, he concludes.

Experts at Ebury say that “weakness in the European economy and in particular the German industrial sector indicates that rate cuts will be more aggressive than expected a few weeks ago, and the sharp fall in Euribor reflects this.”

Reduced commissions

The new decline recorded in September will lead to a new reduction in mortgage payments, which can range from 100 to 200 euros per month, since a year ago the Euribor rate was quoted at 4.149%.

As an example, in case of mortgage loan 150,000 euros for 25 yearsplus interest of 1% on Euribor, the monthly payment will be reduced by more than 100 euros. He annual savings will be more than 1200 euros.

On the other hand, if the mortgage is 300,000 euros for a term of more than 25 years, and with an interest rate of 1% above Euribor, the monthly savings will exceed 200 euros and the annual savings will exceed 2,400 euros.