The twelve-month Euribor, the indicator that is most used in Spain to calculate mortgage payments, has risen again in April, and registers a positive average rate in the month, something that has not happened since January 2016.
In the absence of knowing the latest data for April, and that the Bank of Spain confirms it, the provisional average rate of the Euribor reaches 0.005%, according to Bloomberg data released yesterday. A figure much higher than the -0.237% registered in March; at -0.335% in February; and -0.477% in January. Far away are the lows that the indicator achieved in January 2021, when it stood at -0.505%.
During almost all of 2021, the Euribor maintained a volatile trend, but since the beginning of the year it has been clearly on the rise. The market has been very aware of the monetary policies of the central banks, which have begun to tighten in the face of runaway inflation, which has grown even more due to the war in Ukraine.
In this context, on April 12, the Euribor entered a positive daily rate (0.005%) for the first time since February 4, 2016. Despite the rise registered by the indicator, the director of Mortgages at iAhorro, Simone Colombelli, does not expect the Euribor to continue advancing at the same speed in the coming months.
He argues that “something similar to what happened after the outbreak of the coronavirus is happening”, and that, once the most abrupt changes in the Euribor have been seen, “we could be reaching a certain stability”.
Regarding whether the Euribor can end the year close to 0.5%, Colombelli prefers to be cautious and states that everything will depend on the decisions that the European Central Bank (ECB) can make, which could begin to raise rates in the third quarter of anus.
The strong rise registered by the Euribor in April will cause an increase in mortgage payments, since a year ago, in April 2021, the indicator closed at an average rate of -0.484%.
For an average mortgage of 150,000 euros over 30 years, with Euribor plus a differential of 0.99%, the increase will be about 32 euros per month or about 384 euros per year. If the mortgage loan amounts to 300,000 euros over 30 years, also with a differential of Euribor plus 0.99%, the monthly installment will be 962.05 euros compared to the 898.36 that was paid in April 2021, according to the iSavings calculations. In this case, the increase will be 63.6 euros per month or almost 764 euros per year.