The Euribor has stagnated in March about 2.4% due to global uncertainty, both for the commercial war and the kick to the world geopolitical board given by the new president of the United States, Donald Trump.
The value of the mortgage index of this last month is an average reduction of 1,300 euros per year (almost 110 euros each month) in the quotas of the loans that are reviewed every 12 months. In March 2024, the Euribor closed at 3.72%.
The reduction for mortgages that are checked every six months is somewhat lower (43 euros per month), because the Euribor stayed in October last year under 2.7% (always on average throughout the month). In these examples, a mortgage of 150,000 euros, 25 years and hired at a variable interest rate with a cost that includes the value of the Euribor plus a differential of a percentage point is taken as a reference.
The new mortgages and new loans are also cheaper with respect to previous months, they are already signed at a variable or fixed interest rate, although in these cases it depends on the offers of the banks. In recent days, the daily value of the Euribor has continued to fall, as seen in the first graph of this information.
“This month, the Euribor has shown us, once again, that we cannot make predictions about its evolution because, in a week, its trend can change a lot. This indicator is very influenced by what happens at the political, social and economic level in Europe and, therefore, it gives us these surprises,” explains Simone Colombelli, director of mortgages of the comparator and mortgage advisor IaHorro.
At the moment, the impact of the tariffs of the United States and the EU response on economic growth and inflation is an unknown, and it is not clear what the central banks will do. The next decision of the ECB will be Holy Thursday, on April 17, after cutting the official interest rates 0.25 points, 2.5% to 2.5%at the second ordinary meeting of your Governing Council in 2025.
This March was the fifth consecutive decrease in the official ‘price’ of money in the eurozone and the sixth since June, when it was in 4%, given the moderation of inflation, the weakness of economic growth and investment needs, especially in defense.
This “relaxation” of the financing conditions was within the roadmap of the monetary institution to give oxygen to the Eurozone, where Spain is the only positive exception. From here, a complex debate begins on the following decisions of the ECB with the commercial war and the effects of tariffs on inflation, growth and exchange rate euro/dollar as a backdrop.
Banks accelerate the granting of credit to families
Recently, the Bank of Spain confirmed that “banks are accelerating the granting of credit to families and companies with the decrease in official interest rates of the European Central Bank (ECB), and therefore of the Euribor.
The lowering of mortgages and loans supports the investment of companies, household consumption and facilitates access to housing, but there is also the risk of reheating prices of floors and houses already fired.
“The interest rates of the new credit operations have maintained a gradual and generalized decrease in segments in recent months, a trend that also begins to be observed in the average cost of living loans [de los préstamos que ya estaban concedidos]”, Explains the Bank of Spain in its latest economic forecast report.
In the following graph, credit reduction is observed from November 2023, until January 2025. A fall in the cost of financing that is a total point until January for new mortgages.
“Household financing has continued to accelerate its expansion in recent months, with an increasing contribution of mortgages,” said the team of experts from the Bank of Spain signed by the report. Families are taking advantage of the most affordable loans in this cycle of types of types to buy housing.
The problem is that this stimulus for demand presses prices that have not stopped rising in recent years, especially in large capitals and in the main tourist destinations, where most of the job supply accumulates. According to the financial regulator data, the “volume” or amount of the new mortgages fell to 120,000 euros in 2023, from where it has promoted to slightly exceed 160,000 euros on average.
“Regarding prices [de la vivienda]the robustness that maintains the demand and the limitations that the supply faces have continued to drive its dynamism, to an interannual growth of 11.3% in the late 2024, ”says the experts of the Bank of Spain. This is one of the main“ bottleneck ”(a threat) for the consumption of families and for growth in general.
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