Sunday, October 1, 2023

How will the new interest rate increase affect my mortgage?

The European Central Bank (ECB) countered with another interest rate hike. The European institution announced a new one this Thursday Increase of 0.25 points, tenth increase in a row. The price of money will be at 4.5% with this new increase, while the deposit interest rate will also be increased will reach 4% and that of the loan facility will reach 4.75%.

The interest rates are thus placed in their highest level for more than 20 years and it seems things won’t stop there as the President of the ECB, Christine Lagarde, does not consider this upward trend, aimed at curbing inflation, to be complete. “The focus of attention will probably shift a little more to the duration, but that doesn’t mean we’ve reached the peak now, because we can’t say it,” Lagarde warned.

What happens now with the Euribor?

“The message was clear and direct: Christine Lagarde and her team will not give in to inflation,” says the economist. Olivia Feldman.

The founder of financial comparator HelpMyCash believes that it is probably the indicator that most variable rate mortgages refer to “start the uptrend again, although we expect it to be slower and more cautious as Euribor anticipates the interest rate cap.”

“Since the accelerating wave of monetary price increases began a year ago, Lagarde has been outspoken. The ECB will make its decisions based on data and with its objective in mind: Keep Eurozone inflation at 2%. And it’s still not done, so there’s nothing to suggest that Frankfurt will begin the long-awaited rate cut,” says Feldman.

In addition, “the constant increase in the price of oil – as well as the price of gas” puts the ECB’s goal in trouble and supports the argument that the institution will continue to be unable to reduce interest rates,” he concludes.

Nation World News Desk
Nation World News Desk
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