Expert offers ‘savings of 100 to 200 euros’ for those with mortgages due to Euribor fall

Euribor has been in free fall since September’s close at 2.936%. A decline that almost no one predicted at the beginning of the year and which brings good news for Spaniards who have an adjustable rate mortgage or for those who want to sign a loan now to buy a house.

“The September Euribor rate pleased us with its closure, which was unexpected for everyone. Even the best forecasts at the beginning of the year did not indicate this possibility, so this is very good news and changes the mortgage landscape,” explains IDEAL Laura Martinez, iAhorro representative.

This unexpected situation was also helped by the latest interest rate cut by the European Central Bank (ECB), which at its last meeting cut rates by 0.5% to confirm a “second straight fall.” “In Spain, house prices are still a problem, but this new situation provides great incentives when it comes to buying because, although prices are not falling, we can now borrow cheaper and buying becomes more affordable.”

Laura said the fall would be “significant” for variable mortgage holders who will renegotiate their payments in the coming weeks. And if in September 2023 Euribor was 4.149%, now it is 2.936%, “a difference of more than one point.”

And that means saving €100 a month for those with a mortgage of around €150,000 over 30 years, and €200 a month for those signing a €300,000 mortgage payable in 30 years. “These are very interesting amounts when you look at the annual portion because it’s a big savings,” he says.

October, key month

The iAhorro expert confirms that Euribor is now experiencing its best moment in more than a year. However, despite the fall, October appears to be key: “October marked Euribor’s highest peak last year, peaking at 4.170%, before it began to fall. If things continue like this, the biggest savings will come next month. A situation that also benefits those about to sign a new mortgage, as banks begin to offer better terms on fixed and mixed loans.