After many years “disappeared”, the Euribor once again burst into the lives of hundreds of thousands of Spanish families with debt at the beginning of last year. Then, the European Central Bank (ECB), to stop the rampant inflation that began to invade the European economy, began to raise interest rates, which also caused an increase in the Euribor and a progressive increase in the cost of credit. In October, after raising the official currency rate to 4.5%, the highest since 2001, the institution led by Frenchwoman Christine Lagarde put the brakes on these increases. With this, it opens a window of hope for mortgage holders, who have seen how in recent weeks the Euribor has not only stopped its rise but even relaxed around 4%, which leads many to think about the question that almost every mortgage holder in Spain now has in his head: when will the mortgages begin? The answer is not simple or certain, but if inflation is not controlled, experts do not rule out that the reduction may begin in the middle of the year.
“It is difficult to make predictions of this kind, because the evolution of the Euribor will depend on the policy of the ECB, which in turn will be more or less aggressive depending on what inflation can do,” explained Miquel Riera, head of website debts. Financial HelpMyCash. “Currently, the forecasts suggest that the ECB will maintain its high rates for a while, without increasing or decreasing. It is likely, therefore, that the Euribor will stagnate or moderate, in line with what happened in the last few week ,” added Riera. This, however, does not mean that there will be an immediate reduction in debts. As this expert details, “if you consider that the Euribor has traded above 3.5% since February 2023, more than 4% since June (4.007%) and that it exceeded 4.1% in July (4.149 %), September (4.149). %) and October (4.16%), those with a variable rate mortgage with a semiannual review will see reductions in their installments at some point in the first quarter of 2024. On the other hand, those with a mortgage with an annual review may will experience these reductions in their quotas in the second half of 2024”, he concluded.
The reason that it is not until then that we begin to see reductions is that, as detailed by David Fernández, CEO and founder of Coventia, an insurance underwriting agency; Although the Euribor points according to its forecast to a stabilization around 3.9%-4.3% in the next twelve months, the variable loans with annual review will only start to fall if the level of the indicator is more lower than that marked in the same month last year. . And that, if quoted at around 4%, will not happen until June, because the Euribor is 4.007% in the sixth month of this year.
In any case, Riera and Fernández clarified that these reductions in installments will be “minimal”, a point where they agree with Juan Villén, general director of idealista/mortgages, who is not so clear that the reductions will be visible in the next year’s debts. “There is still a lot of uncertainty in the markets: inflation remains high, although it has decreased; and there are factors that will not help it to decrease, such as the geopolitical situation (especially Ukraine and Gaza), the arrival of winter and the greater demand for energy, salary increases and government measures to counter the effect of inflation… it is very difficult to know whether we are nearing the end or not (with the rise of Euribor).” For this reason, Villén said that although there is a possibility that in the second half of 2024 the 12-month Euribor will start to relax somewhat, “families must plan their economies thinking that – if they have a variable mortgage – it is very possible that they will not see their mortgage payments fall during 2024, or even until 2025”.
To see significant reductions in fees, iAhorro has spoken directly about the need over the years. “To see an Euribor around 2% we have to wait at least between three and five years. at 4.5%, because it is not profitable for entities to lend money at that percentage,” explained this mortgage advisor.
Casavo Hipotecas is also not optimistic that next year there will be notable reductions in Euribor and, therefore, in loans. “According to the forecasts of various financial entities, it is estimated that the 12-month Euribor will be between 4.08 and 4.15% in December 2023, to begin a slight fall that will bring it to around 3.9% in 2024 and up to 3.4% in 2025,” they explained. What they are sure of is that the times of Euribor in negative values are behind us. Ricard Garriga, CEO of Trioteca, added that “without controlled inflation we cannot bet on the reduction of rates, nor on Euribor. At Trioteca we believe that there is still a long way to see reductions in variable installments mortgages and the most “safer to change it to a fixed or mixed rate”.
Manuel Fernández, deputy general director of the Unión de Créditos Inmobiliarios, also believes that the rates will remain high and will determine that there will be no drop in the Euribor with the same force as its rise, although he also suggests not it will increase. . “It is obvious that inflation has started to decrease throughout Europe and that, together with the economic recession in the main European economies (Germany and France), this leads one to think that the ECB rates have increased, ” he said.
“What the European Central Bank is doing is not raising rates, which is something different from lowering them. And with the expected inflation in the eurozone for 2024 at 2.9%, I don’t think it will do it,” added David in same feeling.. Fernandez.