The Euribor closes the month of November close to 2.5% on average. This is the eighth consecutive monthly decline for the benchmark index for most loans. On this occasion, this setback saves 1,500 euros per year on variable interest rate mortgages that are updated in December – always taking as an example a loan of 150,000 euros for 25 years to which a differential of one percentage point plus the Euribor and that it be reviewed every 12 months.
The Euribor has been reduced by 1.5 percentage points in the last year, from the 4% it was in November 2023. This drop in the interest rate is similar to that seen in October, and represents a reduction of almost 125 euros in monthly installments.
In the case of variable interest rate mortgages that are updated every six months, the savings are somewhat lower, about 95 euros per month and 575 euros in the semester, because the step that applies is 3.68% of May of this 2024, at the current 2.5% — again, for the type of loan normally used as an example.
“With an amount similar to the 1,479 euros that we could save with the mortgage review [a 12 meses]there are several options from a financial point of view on what we could do. On the one hand, allocate it to early repayment, always, taking into account that there are mortgages that have commissions for this concept and could alter these calculations. If we do not have these surcharges, if we reduce terms, we maintain the installment of 755.51 euros/month, shorten 4 months and save 1,933.63 euros in interest; while if we reduce the fee, it would drop to 747.91 euros/month with a saving of 712.98 euros in interest,” says Pablo Vega, financial product expert at Roams.
According to the mortgage analyst of the financial comparator ‘HelpMyCash.com’, Miquel Riera, “it was expected to reach that 2.50% in December, but the collapse of the Euribor has exceeded expectations.” And that, in the opinion of the specialist, is good news both for those who have a variable mortgage and for those who are considering signing a mortgage loan soon.
According to the latest data available from the INE, mortgages are being signed at an average interest rate of 3.14% – 2.92% for variable-rate ones and 3.30% for fixed-rate ones – the lowest since April 2023. “Despite the fact that the Euribor is falling since the ECB will also cut official interest rates [la institución tomará su próxima decisión el 12 de diciembre]banks will not have time over the next month to further adjust their offers. We will see the new discounts in 2025,” predicts Simone Colombelli, an expert at another mortgage comparator, iAhorro.
The drop in interest rates means that, in September, 41,306 loans were signed for the purchase and sale of homes in Spain, which represents an increase of 33.9% compared to the same month in 2023, and the best figure in the mortgage contracting in the last two years, precisely since September 2022, according to the latest data published by the INE. In total, home sales rose to 61,887, a maximum for the month of September since Statistics collected these, and the highest number recorded since July 2007.
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