The Euribor rebounds to 3.7% in March, but experts anticipate drops

The reference index for most mortgages, the Euribor, closed the month of March with a slight increase, reaching 3.

Oliver Thansan
Oliver Thansan
31 March 2024 Sunday 22:24
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The Euribor rebounds to 3.7% in March, but experts anticipate drops

The reference index for most mortgages, the Euribor, closed the month of March with a slight increase, reaching 3.71%, compared to 3.67% in February, although the forecast is that there will already be marked its maximum in the current cycle of interest rate increases and from now on it tends to decrease.

The March increase, of four hundredths, is the third consecutive and places the Euribor at the highest level since November, when it was 4.02%. In 2023, after the interest rate increases initiated by the ECB in July 2022, the index started at 3.33% and registered six consecutive months with levels above 4%, between June and November.

A mortgage loan of 100,000 euros, which is the average of the outstanding balances, with a term of 25 years now generates a monthly payment of 568 euros, just three euros more than a month ago. The cost is also similar to the 564 euros from a year ago, but 17 euros lower than the 593 euros in July of last year, when the reference index reached its maximum of 4.14%.

In its last monetary policy meeting, at the beginning of March, the ECB kept interest rates at 4.5%, but reported that its inflation forecasts are beginning to approach the target. Analysts assume that starting in June the idea of ​​applying the first reductions in the price of money will gain strength.

The association of banking users Asufin considers that the mortgage market is “in no hurry” to lower interest rates, and that for this reason the increases have persisted until March. However, it predicts that starting in April there will be drops in the Euribor, initially up to 3.5% and later, once July has passed, below 3%. Its forecast is that this year it will fall to 2.6%.

Since the rate increases began in mid-2022, the average mortgage has accumulated an increase of 213 euros per month. In annual terms, the amount amounts to 2,556 euros.

“The decline will be slow throughout the year,” says Asufin. “At the end of April, and in the following months, if expectations are met, significant monthly and annual fee reductions will be seen,” he predicts.

This forecast is similar to that offered by the comparator Kelisto, which expects the first interest rate drops “at least” in June and which estimates that the Euribor will close the year at around 3%.