The Euribor confirms the start of its de-escalation in December with the biggest drop in 14 years

The Euribor begins to give a break to mortgages. The index to which most variable rate housing loans in Spain are referenced will close the month of December at 3.679% after registering the largest monthly decrease in the last 14 years, since 2009.

After more than a year and a half of continuous increases since the European Central Bank (ECB) began to encourage the rise of rates in the Eurozone, the indicator now confirms the beginning of its de-escalation and for the first time since June it is below the level of 4% in its monthly average.

The market thus interprets that central banks will begin to loosen interest rates at some point in 2024, sooner rather than later, but even so, experts call for caution. “This drop in the Euribor confirms a change in trend, but we have to be cautious: it is most likely that it will remain around 3% for many months before continuing its fall,” says Simone Colombelli, director of Mortgages at the financial comparator iAhorro. .

The decrease in December affects, above all, people who have a variable mortgage and this month they have to review their payment.. On the one hand, the biggest (and best) surprise will be those who have a semi-annual review under contract, since they will see, after three upward reviews, that their monthly payments will drop between 30 and 60 euros depending on the amount of their mortgage. .

Of course, those who will still have to wait a few months to see this reduction will be the mortgage holders who have the annual review. In this case, the fees will continue to increase, although less aggressively than in previous months, between 60 and 110 euros per month.

The comparator makes an estimate based on an example with the contracting of a variable interest rate mortgage in December 2021 for 20 years, with a differential of 0.99% + Euribor, but with an annual review. “In these three years, with two upward revisions, its fee has increased by more than 300 euros. On the one hand, in the December 2022 review, its fee went from 448 euros per month to 707.01 euros (+250.01 euros), and now it will also rise to 762.29 per month (+55.28 euros)” , pick up.

In the case of a mortgage of 300,000 euros, with the same conditions as in the previous example and with an annual review, this year's increase increases to 110.56 euros.

Regarding the medium and long-term perspectives, experts agree that we are only at the beginning of a decline that will be continued and also with a certain dynamism.. At Asufin, the Association of Financial Users, they predict that the Euribor for March could already be at 3.30%; that of June, at 3%, and that of September, at 2.80%. “At the end of next year we could see a Euribor of 2.60%,” they say.

For Manuel Pinto, XTB analyst, “the Euribor will continue to fall in the coming weeks, thanks to the downward momentum in inflation derived from lower demand and the future decisions of central banks, in order to stimulate the economy.”. In this context, “it would not be surprising if the reference interest rate falls to levels close to 2% throughout the year,” he predicts.