Heels|The one-year euribor has already fallen by more than a percentage point in a year. For debtors, it means a “sharp decrease in interest costs”.
Finland the most used mortgage reference rate fell below three percent on Monday. On Monday, the interest rate was quoted at 2.986 percent. The last time the interest rate was below three percent was in mid-December 2022.
“A big milestone in the interest rate market! The 12-month euribor dipped below the psychologically important 3 percent level for the first time since December 2022. The era of interest rates above 3 percent lasted for 440 consecutive days,” writes OP’s senior market economist Jari Hännikäinen message service in X.
Interest rates have already fallen by more than a percentage point from a year ago. It means that the loan costs of debtors who tied their mortgage to the Euribor for one year already fall quite clearly when the loan interest rate is revised. According to Hännikäinen, the drop in interest rates already means a “sharp drop in interest costs” for the debtor.
On the market interest rates are expected to continue to fall. Based on interest rate derivatives, the market expects the 12-month Euribor to drop to around 2.1 percent in a year’s time.
“However, it’s good to note that pricing does not guarantee anything and can change even on a fast schedule,” Hännikäinen reminds X.
European the central bank (EKP) will meet this week on its monetary policy. The market expects the ECB to lower its key interest rates by 0.25 percentage points.
About 30 percent of Finnish households currently have a mortgage.
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