The Euribor remains stagnant and, at least until after the summer, will continue to reduce the quota of the mortgaged. In the absence of a session to dismiss the month, the main indicator of variable rate mortgages in Spain dismisses the month of June at -0.484%, a level very similar to that of May, but below the -0.147% of June of last year.
Since last April, the Euribor has remained practically unchanged, which has allowed it to remain below the levels of a year ago, and guarantee reductions in the mortgage installment. In this way, those who review their mortgage with the closing of the Euribor in June will be able to save up to 500 euros per year.
E. Sanz
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According to calculations by iAhorro, those mortgaged with a loan of 150,000 euros with a TIN of Euribor + 0.99% so far they paid 471.72 euros per month. With the new Euribor reduction compared to 12 months ago, your new fee will be 450.84 euros, which means a saving of 20.88 euros per month or 250.56 euros per year.
In the case of a loan of 300,000 with a Euribor spread + 0.99% the saving will be up to 500 euros per year. In this case, the mortgaged will go from paying 943.44 euros to paying 901.69 euros, a monthly difference of 41.75 euros that multiplied by 12 shoots up to 501 euros per year.
“Good news for those who have to review their variable mortgage for those who review in 12 months, since in June of last year the Euribor was at -0.147, and not so good for those whose revision is made every six months, since the December Euribor was at -0.497, so they will see how their mortgage payment has a slight increase, although very subtle, “says Sergio Carbajal, head of mortgages by Rastreator.
No short-term changes
“The Euribor starts the frozen summer in negative territory. In addition, the trend of this 2021 is being maintained, slight rises and slight falls of the index“, adds the director of Mortgages of iAhorro, Simone Colombelli, in whose opinion,” for the moment, there will be no major changes in the Euribor, since the stability of the Euribor is related to the economic decisions taken by the European Central Bank ( BCE) “.
“In March 2016,” recalls Colombelli, the ECB decided to lower interest rates to zero. A month earlier, the Euribor entered negative territory for the first time in its history. In the following months, the fluctuations of the indicator have always moved in negative terrain like the types of the European institution“.
Regarding the stability of the indicator, Colombelli points out that this is going to be the trend in the coming months and even years. “In the short term there will be no changes compared to the Euribor, however, you always have to closely monitor what the banks are doing. Looking ahead to this summer, interest rates will remain pending the last quarter of the year, which is when the financial institutions will put all the meat on the grill. ”
Carbajal assures that the trend of the Euribor is like that of recent years, it may be that in the month of August suffers a slightly higher decrease. In fact, it would be necessary to go back to 2018 to see a Euribor that in the summer months, July and August, rises with respect to the value marked in June of that same year ”.
Be that as it may, according to Colombelli, “the mortgaged ones can be calm for now. Predictably a summer awaits them and, practically, a last quarter of the year with sales. major rate hikes, but not before 2022“In this sense, all those who have their Mortgage referenced to this index will not have to worry about their installments becoming more expensive, at least, until the final stretch of the year.
E. Sanz
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And is that, if we look at the evolution of the Euribor from the second half of last year -see graph above-, the data reflects a steep fall from July to hitting the ground in December 2020 and January 2021, when it fell to -0.5%, to initiate a timid recovery in February of this year. However, as of September or October, if the Euribor remains at current levels, it will be above the levels of a year ago, which will increase the mortgage quota. The positive news is that this increase will translate into just a few more euros per month.
When will there be a change in trend?
The million dollar question now is when there will be a real change in the Euribor. When will it return to positive ground. “Just 12 months ago the Euribor felt the effects of the pandemic and began to decline after three months of increases. Since then, it has chained eight consecutive months of falls until it bottomed out in January with -0.505%. The decision in June 2019 of the ECB to expand its bond acquisition program and inject liquidity into the economy was key, “according to the iAhorro executive.
E. Sanz
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“Now we will have to wait for the next movements of the ECB, although in the summer there are usually no big changes. Financial institutions also bet on stability in the summer season, which can be translated into good news because increases in the interest rates, “concludes Colombelli.
Follow the bet on the fixed rate
Regarding the greater or lesser preference for the fixed rate, both on the part of the mortgaged futures and on the part of the financial entities, Carbajal assures that “the fixed mortgage incentives by the banks in order to try to mitigate the effects of this negative Euribor, maintaining the spreads over the variables and improving in some cases the rates on fixed-rate mortgages “.
In his opinion, “this trend can also continue to be appreciated as shown by the INE’s own data from the mortgage statistics for the month of April, since 44.6% of the mortgages granted have been at a variable interest rate and 55.4% at a fixed rate “.
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