The 12-month Euribor plummets in the heat of the interest rate cuts of the European Central Bank (ECB). The index to which most mortgages in Spain are referenced closed November at 2.506%, which represents a drop of more than 1.5 points year-on-year, the largest in 15 years. This lowers the average mortgage by more than 1,500 euros per year.
This decrease to around 2.5% represents a decrease of just under two tenths compared to October and 1,516 points compared to November 2023. To find a greater year-on-year decline in the historical series, we must go back to December 2009 when It fell more than 2.2 points from one year to the next. The level at which the eleventh month of 2024 closed, is also the lowest in more than two years. Specifically since September 2022, when the month ended at 2.23%.
The effect on the variable rate mortgages that are due for review now will be huge and will mean an important relief for families, after the blow they took in their installments since 2022. And it is expected that the trend of the index will continue downwards in the coming months, as long as the ECB continues to lower rates.
An average mortgage of 150,000 euros, for 25 years and at an interest rate of Euribor plus 1% differential had a payment last year according to the Euribor of November 2023 of 878.81 euros per month, which is equivalent to 10,545.72 euros per month. year, according to the simulation carried out by this newspaper.
That same loan now with the euribor November 2024 has a monthly fee of 751.42 euros, which is 9,017.04 euros per year. From one year to the next, the average mortgage has become cheaper by 127.39 euros per month, which is equivalent to 1,528.68 euros per year.
This, in theory, will go further in the coming months although everything will depend on the decisions of the ECB, which will meet again this December to decide on a new rate cut. Although there are uncertainties hanging over the decision. «Given the uncertainty surrounding the internal and external conditions that will mark the ECB’s last decision of the year – among other issues, Trump does not take office until January 6 and the FED will meet again on December 17-18, after of the ECB meeting -, at Kelisto we see a rate cut of 0.25 points as increasingly feasible. If this is the case, we predict that the Euribor would close 2024 below 2.5%. Now, if the monetary authority decided to reduce rates more intensely, we cannot rule out that the main indicator of variable mortgages in Spain will fall even more strongly below that figure,” highlights Kelisto.es spokesperson Estefanía. Gonzalez.
#Euribor #plummets #fastest #rate #years #mortgages #cheaper #euros #year
