This is the month in which mortgages will begin to decline
The era of high interest rates appears to be coming to an end. December 14, European Central Bank (BCE) decided to keep them at 4.5%, and its president Christine Lagarde He has been blunt about the possibility of a fall in the price of money in the face of the resistance that inflation is showing to fall to levels that are less of a concern to monetary authorities, who have set a target of 2%, a figure that will not be met. reality until at least 2025. .
increase in interest rates It started in July 2022 at 0% and after ten consecutive increases is now at 4.5%, and experts believe we won’t see any reduction from the ECB until the summer.
This sharp rise in money prices had a direct impact on Euribor and, as a result, they made mortgages significantly more expensive for hundreds of thousands of people. Currently the benchmark index for mortgages It closed January at 3.6%.
European regulation that will benefit you if you have a mortgage
Given this macroeconomic panorama, many people are very concerned about when they will be able to start lowering their mortgages after nearly two years of strong growth and reduce the significant amount of expenses they attribute to this chapter of their finances.
Euribor, which broke the 4% barrier, is moving lower in anticipation of the next interest rate cut, which analysts believe will not happen until the end of summer.
In this sense, it is from the first quarter of 2024 that citizens will begin to notice mortgage relief, although this will not happen simultaneously for everyone, since It will depend on how many times it is reviewed mortgage every year.
Households who will have to renegotiate their variable mortgages starting in March will be the first to see their payments fall.
The Bank of Spain believes that households and companies in Spain will begin to receive relief on their mortgage payments. according to the March survey of this year For contracts with annual review with Euribor in 12 months.
This is stated in its Report on the Financial Position of Households and Businesses, which also states that the impact of monetary policy and high interest rates on adjustable rate mortgages “will be substantially complete”, and in the reviews “From March 2024 » Downward revisions will begin for mortgages with twelve-month annual contracts.
He the decline will be gradual and they are expected to stabilize during 2025, but always at levels above those that prevailed before growth escalated in mid-2022.
What is happening is that the market is anticipating future ECB rate cuts and is passing on that relief in parts of Euribor and to mortgage holders.
Analysts believe that Euribor will stabilize at around 3% over the course of this year and that now may be a good time to renegotiate the terms of a variable mortgage depending on the interests and needs of each mortgage holder. Looking ahead to 2025, some even believe it could fall to 2.4%.
KaishaBank It is estimated that interest rate cuts planned for 2024 could mean average savings of around €20 per month for customers with a mortgage from the bank. Those mortgaged to other banking institutions will have similar savings.
According to the Bank of Spain, if you pay by card and are asked for your DNI, this is what you should do.
In this scenario, banking institutions are already adjusting mortgages downward for some of their most loyal customers and entering into contracts on several products, and are expected to be able to further reduce mortgage interest rates once the first quarter of the year ends. after strong growth over the past two years.
This figure had the greatest impact on those who took out a variable mortgage when Euribor was negative: monthly payments doubled. They will soon be able to make the most of this reduction, which It will start in a couple of months and will last through the summer.