Doubts about what the monetary policy of the European Central Bank (ECB) will be in the medium term after the financial storm these days lowered the overnight Euribor rate yesterday to 3.36%. On Monday and Tuesday there was already a reduction in the index although it recovered yesterday. Today it has fallen again before the president of the ECB, Christine Lagarde, confirmed the rate hike of 0.5%.
The Euribor is built from the interest rate at which banks lend money. That index always anticipates the level at which rates will be in the medium term. That is why when interest increases set by the Central Bank are expected, the Euribor rises. On the other hand, when it is expected that rates will fall, the indicator goes down.
Today, the banks believe that this scenario of interest rate rises for several months may be in question if the financial storm worsens. For this reason, the interest at which the banks exchanged money today fell, reducing the Euribor to the aforementioned 3.36%.
For now, this movement will not have any effect on mortgages because the indicator used is the monthly average. And for now in March -despite the drops on Monday and today- the trend is upward compared to February. Therefore, those mortgaged who have a revision with the index for this month of March will pay more than the previous month.
Today's data is the lowest since last January 27. The monthly rate for March remains at 3.78%, higher than the 3.53% that closed February. Last Friday it was at 3.953%. Despite the drop registered today, the Euribor remained on the rise in March, at that 3.78%. Just one year ago, the indicator registered a negative rate of -0.237%.
This will mean that the variable mortgages that have to be reviewed with the data for March of this year will once again increase. In the case of a 25-year mortgage of 150,000 euros, with a 1% Euribor differential, it will be about 300 per month, or about 3,600 euros per year.