THE EURIBOR CONTINUES TO FALL, AND MORTGAGES BECOME CHEAPER

The 12-month Euribor ends August with a new decline. Specifically, it recorded a monthly average of -0.498%. This is the third lowest figure in the historical series, only surpassed by January and February of this year, and will reduce thousands of mortgage repayments.

From this autumn, mortgages awaiting the annual review of mortgage loans for the third consecutive year will benefit from the reduced instalment, which has been -0.359% since August 2020. For an average loan (approximately 120,000 euros over 20 years, Euribor Spread + 1%), you can save about 7 euros per month, or about 86 euros per year. However, those who take the half-yearly review will not be as lucky: the rate will be a little more expensive because the Euribor in February was -0.501%.

Currently, experts do not expect significant changes in this indicator in the coming months, and believe that the Euribor may remain in the negative region until at least 2024. Recall that the mortgage lending indicator has stagnated below 0% since the beginning of 2016, thanks to the measures taken by the European Central Bank (ECB) to boost the Eurozone economy and prices.

The interest rate in the common currency area has been at a record low of 0.0% for the past five and a half years, and the deposit rate (i.e. the interest charged by the European Central Bank to banks to deposit their excess liquidity in the national guardian vault.) Euro) is still in the negative zone. The guardian of the euro also buys bonds in the market and announced in July that it will change its strategic objective to maintain easing policies even if inflation exceeds what it believes to be sufficient.

Until now, the eurozone’s top monetary and financial authority has set a reasonable level of price increases at just under 2 per cent, and now sets its target at a flexible 2 per cent to prevent inflation rising more than desired.

In countries such as Spain and Germany inflation is already above 3%, although the market is postponing any hypothetical rise in the price of money in the common currency area until at least the end of 2022, at least until the economy has recovered from the shock of the health pandemic.