The Euribor, the index to which most variable rate mortgages are referenced, stands at 3.735% this Tuesday, February 27, 2024, which means that daily values remain at the level of the month of December 2023. In the absence of Two days to close the month, the monthly rate, with which the mortgage review is calculated, stands at 3.65%, above the 3.61% in January. When the official Euribor data is made official in February, a streak of three consecutive months for the index will be broken.
In this way and facing the monthly closing of the index, it seems that the rise in the Euribor is consolidating in the average for the month of February, with two days left to have the final data, thus jeopardizing a new drop in the monthly Euribor, which has been the trend in the last three months.
Specifically, the provisional average for the month of February 2024 remains at 3.658%, which, in the absence of two more daily data, the closing of the Euribor would imply a month-on-month increase of 0.049 percentage points compared to January, that is, a percentage variation of 1.357%.
As for the daily data, the index marks maximums for the month of December in these last three days, since neither in the month of January nor in the month of February had the barrier of 3.7% been crossed in daily data. Specifically, you have to go until December 14, 2023 to reach 3.719%, before the steepest declines began in the second half of the month.
What is happening in the Euribor?
The market’s exaggerated expectations for interest rates this year have come to a screeching halt. The Euribor has responded to this tension between central banks and financial markets with increases during the month of February. The future of the famous mortgage index will depend on what the ECB does and the central bank is interested in lowering interest rates as late as possible. It is closely linked to official interest rates. Specifically, it goes after the deposit rate. Hence, during the month of February it has once again approached 4%, given the increasingly probable delays in the ECB’s cuts.
A couple of weeks ago, the financial markets had been discounting six rate cuts for this year, which translated into a drop to 2.5% for the Euribor. Now the forecast is for four decreases by 2024, which should bring the Euribor to 3% at the end of the year. The Euribor futures coincide with this scenario, and the December maturity is 3%. This market forms a complete Euribor curve with contracts from March to 2029 and is now anticipating tough months for mortgages. The Euribor is trading at its daily level at 3.73%. The contracts for March (3.9%), April (3.8%) and May (3.7%) are trading above the daily price, which means that the bearish cycle that began in December may be slowing down in the coming months until the ECB announces the first rate cut.
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 the volatility and risk of manipulation, to which these indices were subject at the beginning of the century.
The panel is made up of 18 European banks, including Santander, BBVA, Barclays, Deutsche Bank and Unicredit.
Every business day at eleven in the morning, the average interest rate at which financial institutions lend capital for one week, one month, three months, six months and 12 months is published.
How does my mortgage change?
Taking as an example a mortgage of 140,000 euros for 30 years (360 months), with a differential of 1% and taking the month of February 2023 as a reference (since most mortgages are reviewed at 12 months), when the Euribor It closed at 3.534%, the monthly payment was 712.19 euros.
Now, with the provisional average for February 2024, which stands at 3.658%, the mortgage payment of homeowners who have a review in February will drop to 689.26 euros, which means that they will pay 22.93 euros less than before. one year, that is, the fee remains practically the same after the review.
In principle, the falls in mortgage payments will be felt to a greater extent as the months of 2024 go by, especially starting in April of this year, as predicted by Euribor futures. This is because, although the Euribor shows a downward trend, it does not mean that the decrease in mortgage payments is immediately noticeable. However, it is possible that these falls in mortgage payments will be delayed even further, since it seems that the rate drop will not be as pronounced in the first half of the year.
‘).insertAfter(parrafos[i]);
googletag.display(id);
}
}
);
});
}
} else {
jQuery(function(){
jQuery(“div[class=”b300 pub_mob253″]”).remove();
jQuery(“div[class=”b300 pub_mob254″]”).remove();
cuerpo = jQuery(“#not_12695257 .Article__paragraphGroup”);
if (cuerpo.height()
2024-02-27 19:15:27
#Daily #Euribor #daily #Euribor #marks #highs #year #cut #positive #streak #mortgages #February
