The twelve-month Euribor, the indicator most used in Spain to calculate variable mortgages, is close to closing December at around 2.434%, its ninth consecutive drop, and which will mean new savings in the installments of these loans of more than 1,200 euros per year.
Although there are still two sessions left until the end of December, the Euribor provisionally reaches that average rate of 2.432%, lower than the 2.506% in November, and above all, the 3.679% a year earlier.
This will mean that those who have to review their mortgage annually will see new savings in their payments. In the case of a variable mortgage loan of 150,000 euros, for 25 years, with an interest of 1% over the Euribor, the installment will be reduced by about 103 euros per month or about 1,241 euros per year.
In the case of a mortgage with the same characteristics, but for an amount of 300,000 euros, the savings will be about 207 euros per month or 2,484 euros per year.
The Euribor started the year at 3.609%, then rose to 3.671% in February; and in March, it rose to 3.718%.
In April it began a downward path that continues to this day. That month it closed at 3.703%, a drop with which mortgages became cheaper for the first time in more than two years, since a year earlier the indicator began to increase strongly after the rate increases of the European Central Bank (ECB). .
In May it fell again to 3.680%; in June, at 3,650%; and in July, at 3.526%. In August it fell to 3.166%; in September, at 2.936%, and in October, at 2.691%.
In November it closed with an average rate of 2.506% and registered its largest year-on-year drop since December 2009.
This December, the Euribor will fall again, although with less intensity, despite the rate cut that the ECB carried out on the 12th, by 25 basis points, its fourth drop this year.
This less significant movement of the indicator responds to the rise in inflation and the more aggressive than expected tone of the US Federal Reserve (Fed), which will lower rates less than expected in 2025, “which may influence the future in the decisions of the body chaired by Christine Lagarde”, according to market analyst Manuel Pinto.
The expert points out that inflation has risen again in Europe above the ECB’s 2% target, while the expected growth for the coming years has been revised downwards again.
Despite this, it predicts that the Euribor will resume its decline in the coming months, and that during 2025 it will be trading at levels of 2%, due to the rate cuts that the ECB will undertake in the face of lower economic growth, and inflation below the objective. of 2%.
In statements to EFE, iBroker analyst Antonio Castelo also considers that the indicator has fallen less intensely this month because in recent weeks, the market is assuming that the interest rate cuts that central banks are going to undertake “They are not going to be as intense as we thought.”
After a “significant” fall in 2024, he predicts that the downward trend in the Euribor will continue next year, although it will not do so “neither so much nor so quickly.” The forecasts are that by the end of 2025, the Euribor will stand at 2.1%, he concludes.
Ebury also attribute the slight drop in the Euribor this month to the markets’ lower optimism about the return of inflation to its objectives.
They remember that the Fed, in its meeting on December 18, significantly revised downwards the number of rate cuts in 2025 (only two), “forcing a global readjustment of interest rates in general.” EFE
The rise in inflation stops the downward trend of the Euribor
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