A respite for those with variable-rate mortgages and a bit of hope for those interested in applying for a mortgage soon. The Euribor closes August with 4.073%, just a few hundredths less than in July (4.149%), and ends with a succession of 20 months on the rise since December 2021 when it stood at −0.502%.
Although it remains to be seen what happens with the monetary policy of the eurozone in September, this fact suggests a ceiling for the reference index of variable mortgages in Europe as drawn by the Euribor forecast for 2024 by the mortgage specialists of Housfy.
A decrease of this caliber will not greatly improve short-term variable mortgages, which will still see increases in the next review of conditions. In fact, an average mortgage would see its installments become more expensive by €250 a month —about €3,000 a year— and with a mortgage simulator it is possible to calculate the increase for other mortgages with different capitals.
These mortgaged are still clinging to the ways to improve the current mortgage that are possible thanks to the mortgage law and new royal decrees approved to alleviate the mortgage burden of the population. The change of interest rate to fixed, the mortgage subrogation and the cancellation and opening of a new loan stand out.
Despite the increases, the light comes on at the end of the tunnel: the situation could be reversed in the medium term, towards the end of 2024. The process would not be immediate: the Euribor could rise again in September, staggering, while it decides what its ceiling will be. . This figure, commented by the mortgage intermediation company Housfy, would be between 4.25% and 4.75% in the best and worst scenarios.
The rise in variable mortgages was accompanied by a rise in fixed mortgages, not only to adjust to market interest rates, but also to respond to the growing demand for fixed loans.
Those who have been waiting to apply for a new mortgage will see the market's fixed interest rates begin to slow down. The latest data from the National Institute of Statistics place the average interest rate on fixed mortgages at 3.45% TIN in June 2023, a number slightly above that of May (3.40%).
The situations are different in Europe and North America, but the decisions being made by their central banks are similar on some points. The United States has interest rates between 5.25% and 5.5% and a good margin ahead to raise them further, as long as prices are not contained as expected.
Europe, somewhat more prudent, watches these rates from a distance and, above all, does not give in. The decision it will take in September is unknown at the moment, but a new increase is more than possible in another – and who knows if last – attempt to cool the economy in the eurozone.