Euribor Reaches New Monthly High: Impact on Spanish Mortgages

The 12-month Euribor, the index to which most variable-rate mortgages in Spain are referenced, continues to climb and closed the month of May at a daily average of 3.862%, a new monthly maximum.

Thus, the review of mortgages that take the May data as a reference to set the monthly payment will experience the smallest increase of the year due to the base effect.

The revisions in the previous four months were more than 3.8 percentage points, not only due to the increase in the price of the Euribor, but also due to the comparison with the same months of 2022, when the rate was at negative levels or practically zero for the month of April. . On the other hand, in May 2022 the Euribor was located at 0.287%, so the increase compared to then is 3.58 percentage points.

This means that a person who has contracted a variable mortgage of 150,000 euros for 30 years and with a differential of 0.99% plus Euribor and must review their interest rate in the month of May, will register a increase in your mortgage payment of about 290 euros per month. In absolute terms, I would go from paying about 500 euros to just over 790 euros per month.

This increase in the cost of the mortgage payment would mean an additional outlay for the families of 3,480 euros more per year.

The maximum increase so far this year was registered in the month of March, when the difference between the Euribor of that month compared to that of a year earlier was 3.88 percentage points. This has meant that families with mortgages with the same conditions described above and who update their interest rate with the data for March are facing an extra monthly expense of 306 euros in their installment.

Read more:  The Impact of Rising Euribor on Floating Rate Mortgages in the Balearic Islands

For the director of iAhorro Mortgages, Simone Colombelli, the data for May means that “the Euribor curve is flattening”. “The most logical thing would be that the stabilization that we have seen during the last four months of this index of reference of the variable mortgages maintains also during the next months”, has added she.

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Looking ahead to the coming months, HelpMyCash co-founder Olivia Feldman has ruled out lowering interest rates or the Euribor. “For this to happen we would have to enter a recession. Although for just over a year many analysts have predicted that the United States will enter a recession and that Europe will follow suit, the truth is that up to now this has not happened and it is not have met these forecasts”, he explained.

On your side, for XTB, The Euribor will continue to rise in the coming months, although its upward path will be increasingly limited. Despite the drop in credit, the broker expects the ECB to increase rates by 25 basis points at the June and July meetings.

2023-06-01 18:26:35
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