what will happen to mortgages this summer

Euribor has brought great joy to many mortgage holders who They extended the mortgage in June. Behind us are months of uncertainty and 2023, which has become a nightmare for bondholders. adjustable rate mortgageMany faced a monthly increase of up to €600, which hit their savings harder than ever and in many cases they had to review debt With bank or trying to sell your dream home.

In 2024, the Euribor trend is likely to be downwards, with the exception of March, compared to the previous year. Is this over yet? nightmare? Simona Colombelli, director of the mortgage lending department at iAhorro, assures that “we have already left the most difficult wave behind us. The stable trend of Euribor and the fall in interest rates of the European Central Bank (ECB) tell us that the situation on the mortgage market can only get better.

Sergio Carbajal, head of mortgage lending at Rastreator, points out that Euribor fell in June, falling below 3.6%, levels not seen since January. “Even so, for Euribor to fall significantly, the ECB would have to announce further rate cuts interest, but this is not expected to happen in the short term due to current inflation. Judging from the July meeting, all indications are that we will have to wait until the end of the summer to see how inflation behaves after the rate cuts they made.”

Solution ECB At the last meeting, the quarter-point cut in interest rates certainly helped this easing of the Euribor – from 4.5% it brought them down to 4.25%. But perhaps it was more noticeable at the beginning of the year than now, when the intention Christine Lagarde, President of the ECB. Is that why Euribor didn’t fall much?

iAhorro explains that despite this rate reduction There are no major changes in sight yet, “because the decline we saw in this indicator in January compared to December and November last year was able to soften the decline we expected now.” It is for this reason that the supply of mortgage lending is practically unchanged.

Now the next date crossed off the calendar by mortgage holders is the next ECB meeting, although experts say it may not be very decisive. It will take place on July 18 next year. It will be your last meeting before you go on holiday. As for what will happen with that appointment, Colombelli believes that “most likely no change in interest ratesbut keep them at the current level of 4.25%.”

One of the main reasons, he points out, is that “ summer In the mortgage and real estate market, this is usually a quiet period: banks remain with minimal services, and citizens go on vacation and prefer to leave these issues “back to school”. This means that in July and August, far fewer loans are signed than in any other month of the year.”

What if in the end BCE surprises and cut interest rates by another quarter point? “It’s hard for banks to change prices and rates with such a small cut two weeks before the start of August. It’s not customary to make changes in the summer, and this year will be no exception,” he says.

So, stability This is the word that defines the trend that will be observed this year. Euribor. After two very turbulent years with many upward revisions during the first half of 2024, the most widely used variable reference index for mortgage lending in Europe has not changed by a tenth from one month to the next. The difference between the average value recorded in January and June is only 0.041 percentage points: from 3.609% recorded in the first month of the year to 3.65%.