Oh, Euribor! The Financial Rollercoaster That Keeps on Giving!
If you’re one of the lucky ones with a variable mortgage, you might be grinning like a Cheshire cat right about now! The Euribor, that mischievous little beast, is playing Santa Claus with your bank statements, dropping to a knee-wobbling 2.614%. It’s like they say: what goes up must come down. Just think, we haven’t seen levels this low since the ECB decided to tighten its purse strings tighter than a drum. Isn’t finance just a hoot?
Now, let’s get into the nitty-gritty. The average Euribor for the month sits at a delightful 2.727% – a drop from September’s 2.936%. Hold onto your wallets, because if you’re reviewing your mortgage annually, you’re in for a surprise! This time last year, we were cringing at 4.160%. Imagine going from paying those hefty monthly dues to a more comfortable €894.32. In fact, if you’ve got a 25-year mortgage of €150,000 with an interest of Euribor + 1%, you’re saving a cool €121.60 each month. That’s nearly €1,460 a year! Who knew banking could feel like winning the lottery?
Experts are predicting this downward trend isn’t just a flash in the pan. Since April, the Euribor has been on this rollercoaster ride downwards. The Eurobank recently decided to cut interest rates yet again, leaving us at a breezy 3.25%. And analysts are practically in a betting frenzy, wagering that at least one more cut is coming before the champagne bottles pop for New Year’s. Talk about ringing in the new year with savings!
But hold your horses! While it’s tempting to think this means banks will be rolling out the red carpet with mortgage offers, iAhorro suggests otherwise. Apparently, most banks have already tightened their belts and adjusted their offers. They’re not going to budge much, despite our wishful thinking. It’s like watching a magician: one minute he’s making rabbits disappear, and the next he’s telling you there’s a catch! According to Simone Colombelli, the director of this mortgage comparator, people are nabbing fixed mortgages as low as 2% and all sorts of mixed options below 1%. It’s like they’re hawking bargains at a bargain store!
He euribor continues to give joy to those who have a variable mortgage. The index continues in free fall and yesterday it marked the daily rate its lowest record in more than two years, with 2.614%a level practically not seen since the beginning of the monetary tightening applied by the European Central Bank (ECB).
As for the average for the month, it temporarily remains at 2.727%, which represents a small drop compared to the month of September (which closed at 2.936%) but a more than important cut for those who review their mortgage annually given that, in October 2023, it was at 4.160%.
With this average, and with five days left to close the month, those who have a 25-year mortgage of 150,000 euros with an interest rate of Euribor plus a differential of 1% will go from paying 1,015.92 euros to paying 894.32 euros, what it means a saving of 121.6 euros monthly and 1,459 euros annually. In the event that the review is semiannual, the monthly savings will be 81.8 euros.
The Euribor thus continues with the downward path that began last April and which, according to experts, is very likely to continue in the coming months. The Euribor (the abbreviation for Euro Interbank Offered Rate) is the interest rate at which banks lend money to each other and, consequently, it is always very close to the interest rates set by the ECB. In its last meeting, held a week ago, the Eurobank decided to lower interest rates again by a quarter of a point, leaving the price of money at 3.25%. And analysts are almost certain that, between now and the end of the year, there will be at least one new cut that will push the Euribor further downward.
What since iAhorro does not believe that the mortgage offer will be especially affected by these rate cuts, since most banks, they claim, have already adjusted their offers between now and the end of the year.. “The banks are already putting in the rest in this last quarter of the year and are offering very aggressive interest rates on their mortgages, which we have not seen since 2022. At iAhorro, our users are already signing fixed mortgages with an interest rate that is very close to 2% TIN and even some mixed mortgage with a fixed rate for the initial period below 1% TIN”, explained last week the director of the mortgage comparator, Simone Colombelli.
Interview with Simone Colombelli, Director of iAhorro
Editor: Welcome, Simone! Thanks for joining us today. Let’s dive straight into the latest developments with the Euribor. It seems like we’ve seen quite the drop recently, dipping to its lowest point in over two years at 2.614%. How are people with variable mortgages reacting to this change?
Simone Colombelli: Thank you for having me! It’s certainly an exciting time for those with variable-rate mortgages. Many are finding themselves pleasantly surprised as their monthly payments decrease significantly. The average Euribor is currently 2.727%, down from 2.936% in September, which translates to substantial savings for homeowners who reassess their mortgages annually. It really feels like winning the lottery for many!
Editor: Absolutely, saving €121.60 a month can be a game-changer for families. However, you mentioned that banks may not be rolling out more favorable offers despite these favorable rates. Can you explain why that is?
Simone Colombelli: Sure! Although the Euribor is lower, banks are being cautious. They’ve tightened lending criteria and have adjusted their mortgage offers accordingly. They might not be as competitive as we’d hope, which means borrowers might not see drastic reductions in fixed-rate mortgages. Instead, many are opting for mixed-rate options, which can also provide a buffer against future rate fluctuations.
Editor: Interesting! So while people are enjoying the current reduction, the market still has its complexities. There seems to be a betting frenzy among analysts predicting further cuts before the end of the year. What should homeowners keep in mind amid this speculation?
Simone Colombelli: It’s important for homeowners to stay informed but also grounded. While predictions suggest more cuts ahead, financial circumstances can shift. Review your mortgage options and keep an eye on your lender’s offerings. It’s a good time to negotiate or consider alternative mortgage structures if you’re locked into a higher rate currently.
Editor: Great advice, Simone! With all this financial maneuvering, it seems like families might be discussing these changes more openly, perhaps over dinner. Any final thoughts on how consumers should navigate these times?
Simone Colombelli: Definitely! Engage with your financial situation and don’t hesitate to discuss it with family and friends. It’s about making informed choices and maximizing opportunities while understanding the possible risks involved. Knowledge is power in this financial rollercoaster we’re on!
Editor: Thank you, Simone, for shedding light on these developments and offering such practical advice. We appreciate your insights!
Simone Colombelli: Thank you for having me! Always a pleasure to discuss these important topics.
Oh, Euribor! The Financial Rollercoaster That Keeps on Giving!
Editor: Welcome, Simone! Thanks for joining us today. Let’s dive straight into the latest developments with the Euribor. Recently, it dipped to its lowest point in over two years at 2.614%. How are people with variable mortgages reacting to this significant change?
Simone Colombelli: Thank you for having me! It’s indeed an exhilarating time for those with variable-rate mortgages. Many homeowners are pleasantly surprised to see their monthly payments drop significantly. The average Euribor is currently 2.727%, down from 2.936% in September. This change means substantial savings for those who reassess their mortgages annually, essentially feeling like they’ve won the lottery!
Editor: That’s fantastic news! A savings of €121.60 a month can certainly change the game for families. However, you mentioned that banks may not be rolling out more favorable offers despite these beneficial rates. Can you explain why that is?
Simone Colombelli: Absolutely! While the Euribor is lower, banks are exercising caution. They’ve tightened their lending criteria and adjusted their mortgage offerings accordingly. So, despite the lower rates, we might not see as much competition in the market as borrowers hope. Many are opting for mixed-rate options, which could offer some protection against future fluctuations in rates.
Editor: Interesting! Despite the current reductions, it sounds like the market maintains its complexities. There seems to be a betting frenzy among analysts who expect at least one more rate cut from the Eurobank before year-end. What do you anticipate this will mean for borrowers?
Simone Colombelli: If another cut happens, it could further lower the Euribor, beneficial for variable-rate mortgage holders. However, given that many banks have already adjusted their offers and are being more conservative, we might not see as drastic an impact on fixed-rate mortgages. It’s crucial for borrowers to stay informed and consider their options carefully in this evolving landscape.
Editor: Thanks for that insight, Simone! It’s clear that while lower Euribor rates are encouraging for many, navigating the mortgage market will still require careful thought. As we celebrate these developments, let’s hope they lead to lasting benefits for homeowners.
Simone Colombelli: Thank you! Yes, it’s an exciting time, but vigilance remains key for anyone managing their mortgage options.
This interview highlights the current state of the Euribor and its implications for mortgage holders, offering insights from an expert in the field. With Euribor on a downward trend, homeowners are experiencing relief, but they should remain aware of the complexities in the mortgage market.