The Euribor shoots up to its highest daily level in 10 years

Customers who have their mortgage reviewed in the coming weeks will suffer a sharp increase in fees.

Thomas Osborne
Thomas Osborne
22 August 2022 Monday 10:41
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The Euribor shoots up to its highest daily level in 10 years

Customers who have their mortgage reviewed in the coming weeks will suffer a sharp increase in fees. Today the Euribor, the most common reference rate for home loans, has reached daily highs since April 2012, shooting up to 1.3%. A year ago, the indicator was around -0.5%.

The reference used to review mortgages is not the daily Euribor but the annual one and in August it can end up around 1.1%. This means that for a mortgage of 150,000 euros over 25 years with a spread of 1 point, the monthly increase in installments will be around 110 euros. They are more than 1,300 euros a year. It's a 20% hike.

The 1.3% daily rate had not been reached since April 2012. What this rate actually shows is that the banks are already anticipating the next rise in interest rates that the European Central Bank (ECB) could give at the meeting of September.

In fact, the Euribor is calculated as the average interest rate that European banks lend.

The market is now discounting a new rate hike of 0.5 points by the central bank, given the persistence of high inflation, which in July reached an all-time high of 8.9% for the eurozone as a whole.

It would be the second rise of 0.5 basis points, after the ECB surprised with a first increase at its July meeting.

With this daily rise in the Euribor, the index registers a provisional monthly average of 1.125%, with six sessions to close in August. If it ends like this, it would be its highest level since June 2012, when it stood at 1.219%, reports Efe.