The Euribor: A Whimsical Dance Below 2.7%
Madrid—hold onto your wallets! It seems the one-year Euribor, that sneaky little indicator we love to hate when grappling with variable mortgages, has dipped below 2.7% as of this fine Monday. That’s right folks, this is the lowest the Euribor has been since October 2022! What a rollercoaster of interest rates! If only I could ride a rollercoaster with as much finesse as the Euribor navigates these financial ups and downs.
Now, let’s break this down. This delightful drop is all thanks to the whispers (and, let’s be real, loud shouts) about potential interest rate cuts across Europe—because who doesn’t love a good cut in these times? I mean, I’m all for lower costs, whether it’s mortgage payments or my beloved snacks! We’re currently looking at what could be the monthly average hitting around 2.745%. If it keeps this downward spiral, we might just see it tumble further before October takes its bow.
The Downward Spin Continues
So, what’s the deal? If this continues—and according to financial crystal balls, it just might—we could be celebrating a downward trend for seven consecutive months! Try saying that three times fast while standing on one leg. Meanwhile, in September, our friend Euribor was already in fine form, closing out at a gloriously low 2.936%, the best we’ve seen since November 2022. I mean, at this rate, we might mistake it for a discount coupon for mortgages! Cha-ching!
Now, let’s address the whispering analysts who predict that if the European Central Bank (ECB) keeps playing its cards right with interest rate cuts, we could see the Euribor frolicking around a delightful 2.5% by the end of the year. That’s a marvelous distinction, especially considering it was strutting down the street at a horrifying 4.16% just a year ago. It’s as if we’re watching the worst haircut in history grow out nicely—slowly but surely.
Mortgage Holders Rejoice!
For all the valued mortgage holders out there—yes, you at home with the stacks of paper that look more like bedtime stories—this drop means savings. Picture this: If you’ve got a mortgage for €150,000 over 25 years at a differential of just 1%, you might be looking at saving roughly €120 a month during your annual review. Just think, folks—you could finally update that Netflix subscription!
So, what prompted this downward spiral? Well, it turns out that last Thursday, the ECB’s Governing Council decided it was time for a little cut—25 basis points (that’s a quarter of a point for those of us who haven’t fully embraced financial lingo yet). This marks the second consecutive hike in cuts this year, and let’s hope they keep it coming, like a sitcom that just won’t quit.
Conclusion
All in all, this delightful dip in the Euribor rates is good news for those who’ve seen their financial futures waver like an unsteady tightrope walker. Let’s keep our fingers crossed it doesn’t suddenly decide to turn back upwards like a bad sequel. After all, in the world of mortgages, better rates mean better days! So, here’s to cheap mortgage payments, fewer worries, and perhaps a little extra change for a celebratory pint! Cheers!
Madrid (EFE).- The one-year Euribor, the indicator most used in Spain to calculate variable mortgages, has fallen below 2.7% in daily rate this Monday and has reached its lowest level since October 2022.
This decrease, motivated by the prospects of new interest rate cuts in Europe, will make mortgage loan payments cheaper.
The Euribor, which has been declining for six sessions, is around a monthly average of 2.745%, which could be lower if the downward trend continues throughout the remainder of October.
If confirmed, this indicator would have a downward trend for seven consecutive months.
In September, the Euribor fell for the sixth consecutive month and closed with a monthly average of 2.936%, the lowest level since November 2022.
View of a bank in the center of Oviedo. EFE/JL Cereijido/ Archive
The Euribor could end the year at around 2.5%
According to analysts, if the European Central Bank (ECB) maintains the planned path of rate cuts, the Euribor could end the year at around 2.5%.
Since the Euribor stood at 4.16% a year ago, in October 2023, mortgage holders will benefit in the next review.
For example, those who have a mortgage of 150,000 euros for 25 years and with a differential of 1% would save about 120 euros per month on their annual review.
The fall in the Euribor occurs after last Thursday the Governing Council of the ECB decided to cut the reference interest rate by 25 basis points (a quarter of a point).
This is the second consecutive reduction and the third so far this year.
