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News on the Euribor

Mortgages are more expensive in August at about 80 euros per year
22 August 2010


The Euribor to twelve months, type that are referenced most mortgages in Spain, is expected to close in August 1.42%, nine hundredths above the level of August 2009 (1.334%), with the indicator break the downward course of the last 21 months and raise the mortgages for the first time since November 2008.

The increases will be slight and the pockets of consumers barely notice, however, the trend has reversed Euribor and henceforth the increases will be gradual. Specifically, for an average mortgage of 150,000 euros, to 25 years at an average spread of 0.80%, consumers paid from August of 651 euros a share, compared with EUR 645 paying ago year. This represents an increase of about six per month and about 72 euros per year.

Users with semi-annual review mortgages recorded a rise of 14 euros per month as pay 645 euros in August compared to the 637 euros they paid in February, when the Euribor stood at 1.225% level. The increase amounts to 84 euros per semester.

If the trend does not change and continued to add spikes monthly indicator - the fifth consecutive record in August - re-mortgages more expensive in the coming months. The experts consulted by Europa Press explains that the evolution that is registering the economy is the factor that is driven indicator increases, which could close the year at the level of 1.5% or 1.6%.

Atlas Capital analysts conclude that the upward movement will be slight and gradual, as the two factors that could cause a strong growth indicator is a rise in interest rates or a tightening of the interbank market increased due to the lack of liquidity .

In his view, neither of these two events will occur in the short term, and that rates will not rise until at least mid-2011, and the European Central Bank (ECB) has secured liquidity, although tensions between banks have not yet disappeared.

For this reason, believe that evolution Euribor corresponds to a movement of fit that is in line with the progress of incipient recovery in the economy that is recording, so that the rise of the indicator will light and progressive. They consider that if you register a sudden change, upwards or downwards, is because the situation has changed and institutions have to reapply for extraordinary measures.

Renta 4 analysts also agree that the Euribor futures point to a slight rise and prolonged until the ECB raising interest rates, a fact that, in his view, could occur in the second or third quarter of 2011.

For their part, experts from Selftrade Bank and IG Markets also explain that the indicator is "doomed" to rise, well-motivated by the differentials that are implementing the banks in their operations, either because interest rates will rise next year . However, they concluded that the market will still take years to see a Euribor at levels of 4% and 5%, as occurred in 2007 and 2008.

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