Good news for those who have one mortgage and those who have to review these months. Since the downward path of the reference interest rate for the variable mortgages in Spain -he Euriboran index that reflects at what price European banks lend money to each other—mortgage payments have not stopped getting cheaper. The year 2024 closed, according to data published by the Bank of Spain this Thursday, with a figure for the month of December of 2.436%. This is the lowest level for a month since September 2022 (when the Euribor stood at 2.233%). The year, for now, begins at around 2.4% and places the rate today at 2.448%.
But how does this affect Spanish mortgages? The Euribor peaked in the month of October 2023, reaching 4.16%4, a figure that raised mortgage payments to the maximum for those who had contracted a loan at a variable or mixed rate. Since then, the successive Lower interest rates by the European Central Bank have been putting downward pressure on the Euribor, and in turn the monthly amount paid by mortgage holders..
How will my mortgage go down?
Specifically, as explained by the experts of the mortgage comparator Helpmycashthose who have signed a variable mortgage they will notice a reduction in their average payments of about 100 euros per month. “The interest on the variable mortgages reviewed in January will be calculated with the December Euribor. And since its value, 2.436%, is lower than that of a year ago (3.679%5) and that of six months ago (3.650%), the holders of these mortgage loans will benefit from a reduction in their payments,” the Helpmycash experts in the press release issued after the publication of the official data by the Bank of Spain.
“The year is starting more than well for those who have a variable mortgage“, they add, and specify that for an average mortgage loan of 150,000 euros for 25 years with an interest of Euribor plus 1% and annual review, The reduction will be about 103 euros per month (about 1,239 euros per year). On the other hand, those who have a semiannual update will see a similar decrease of 101 euros per month (about 605 euros per semester). The specific figure, however, will vary according to the personal case of each mortgage holder depending on the conditions that have been negotiated and the amount of the loan.
Up to 1,200 euros less mortgage payment per year
On the other hand, they indicate from Kelistoif the month of January closed today, those who had a variable mortgage that was reviewed in February would notice a significant drop in their payment. Specifically, its quota would be reduced by 11%: that is, You will save about 94 euros per month (1,135 euros per year)thanks to the drop in the benchmark index compared to January 2024.
In addition to the effect that the drop in rates has on those who are already borrowers, it presents an opportunity for those who are thinking about applying for a mortgage (especially fixed or mixed), since they will be able to opt for cheaper products. “In the case of variable mortgages, their interest will be lowered naturally due to the decrease in the Euribor. And in the case of fixed and mixed companies, the forecast is that banks will reduce interest of its offers”, say the experts of Helpmycash. For its part, since iSavingsalready warned at the end of December about the possibility of a ‘mortgage war’ derived from the decline in interest rates and the Euribor.