The Euribor goes up for the first time in ten months: how will it affect your mortgage?

The Euribor goes up for the first time in ten months: how will it affect your mortgage?

In the absence of knowing the final data, the Euríbal closes the month of January with the first monthly climb in ten months and amounts to 2.52% in its provisional average, nine tenths more than the month of December. The reference index for the variable mortgages in Spain breaks with the descending path and does so coinciding with the fourth consecutive cut of interest rates of the European Central Bank (ECB), which should press the index down.

Although they are bad news for the mortgages because It breaks with the downward trendthose who review this month their quota will continue to be benefited.

In fact, according to the HelpmyCash Mortgage specialist, Miquel Riera, “the variable mortgages that will be reviewed with the value of the Euribor of January 2025 will be reduced, they will be reduced, they will be reduced, Despite the last rise in this index, and its headlines can save an average of just over 1,000 euros per year

How will it affect mortgages?

The monthly average of the Euribor is used to calculate the interest that those who have hired a variable mortgage will pay. This reference index only Impacta in mortgages at variable type, which are those whose interest is calculated by adding the Euribor plus a differential.

But Why will variable mortgages be reduced if the Euribor goes up? From Helpmycash, they remember that the interest of these products is not updated monthly, but in a semiannual or annual way, depending on what is indicated in the contract. On the date of review, the bank uses the last published value of the index to recalculate the applied type: if it is lower than the previous update, the fees will go down, while, if it is superior, the monthly payments will be more expensive.

The Euribor of the month of January closes provisionally in a much lower value At the rates registered a semester (3,526%) and a year ago (3,609%). “Consequently,” says Riera, “those who have a variable mortgage may be calm, because their quotas will go down if they have a review in the coming weeks.”

How much will the average mortgage go down?

Assuming that a person has an average variable mortgage signed with a pending amount of 150,000 euros, a period of 25 years and an interest of Euribor plus 1%. If it is updated semiannually with the January value of the index, its installments will fall from about 836 euros About 753 euros per month, which will mean savings of about 83 euros per month (about 496 euros to the semester). And if the review is annual, monthly payments will be reduced from 843 to 753 euros, approximately; about 90 euros less per month (almost 1,077 euros less a year).

The drop in fees, of course, will be greater or less depending on the conditions of the mortgage that will be reviewed: its pending amount and term and their interest.