The Euribor, the index to which most variable mortgages are referenced, presents this Wednesday, November 13, 2024 a new annual minimum of 2.495%, breaking down the 2.5% barrier, something that has not happened since September 2022. Given the continuous declines in the index, the experts who follow it have continued to cut their forecasts, but the Last, there are already five days of consecutive falls, it is already close to the experts’ consensus for 2025.
This is the fifth consecutive annual minimum that the Euribor has achieved in this month of November, following in the wake of last October, when the index closed the seventh consecutive month of decreases of 2,691%. The index in its daily rate has fallen by 2.5% for the first time in two years. It has not happened since September 2022, in the midst of the rise of the Euribor. With the data in hand, the provisional average for November is located at 2.571%. If confirmed, it will mean a new reduction for mortgages that have to be reviewed at the end of this month.
Taking into account the bearish dynamics that currently accompanies the Euribor, the question is clear: How long will the Euribor declines continue? What do the analysis houses and expert forecasts say between now and the end of 2025?
Well, to put it in context, we have to stop and look at the latest movements of the European Central Bank (ECB), which directly influence the Euribor. In the last of the meetings, the ECB lowered interest rates again by 25 basis points, with a deposit rate that remained at 3.25%. In addition, new rate cuts are already being discounted, one per meeting, between now and the end of the year and, at least, until the summer of 2025. The normal thing is for the Euribor to get closer to the bank’s official rate, but, for now, is pricing in cuts to continue next year.
This is very good news for those with variable rate mortgages, who have a perspective of future reductions in their payments. At the moment, experts are updating their forecasts in light of the new falls in the Euribor.
What happens with the Euribor forecasts?
Funcas In its panel of economic forecasts, it includes the opinion of 19 of the country’s most prestigious economic firms, such as bank or university study services. It includes the consensus on how the Euribor will evolve in the coming quarters. For the second quarter of 2025, it aims for an average of 2.46%, very close to current levels. For the third quarter, the forecast is for it to be 2.52%.
The same has happened with the forecasts of CaixaBank. While these experts assured in their report from September 2024 that the Euribor would be at 2.55% at the end of 2025, they lowered the forecast in the last updated report for the month of November, where they placed it at 2.18%. For its part, Bankinter, which offers its forecasts on a quarterly basis, did so last September, placing the Euribor at 2.75%a figure that is far from that of other analysis houses and that, if updated, will surely be closer to 2% than 3%.
But what do the people themselves say? Euribor futures right now? The Euribor is prepared with the interbank loans that the large financial institutions in Europe make among themselves, but, at the same time, it is also quoted in the financial markets, through financial futures. The most common is three months and its contracts are usually interpreted as a good indicator of what Euribor investors expect. While last week they were placed in the 2.06%the new data goes further and places the December 2025 contract in the 1.93%.
How does it affect my mortgage?
This downward trend that the Euribor is experiencing directly affects mortgage reviewsboth semiannual and 12 months, since banks recalculate variable mortgages with the monthly average, rising or falling compared to the data from six or twelve months ago.
To see it with an example, for a mortgage of 140,000 euros for 30 years (360 months), with a differential of 1% and taking the month of November 2023 as a reference (since most mortgages are reviewed for 12 months) , when the Euribor closed at 4.022%, The monthly fee was 753.43 euros.
Now, with the provisional average for November 2024, which stands at 2.571%, the mortgage payment of homeowners who have a review in September will drop to 604.73which means that They will pay 149 euros less than a year ago and the first drops in the monthly payments of those mortgaged will begin to be noticed.
How is the Euribor calculated?
The Euribor responds to the name European InterBank Offered Rate and is calculated through a panel of European banks that report every day at what rate interbank loans are made. As of 2020, calculations are carried out in a hybrid manner. The panel data is included, but also the market’s own estimates, with the aim of reducing volatility and the risk of manipulation, to which these indices were subjected at the beginning of the century.
The panel is made up of 18 European banksamong which are Santander, BBVA, Barclays, Deutsche Bank or Unicredit.
Every business day at eleven in the morning, the average interest rate at which financial institutions lend capital to each other is published. one week, one month, three months, six months and 12 months.
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