Prediction of eurbor rate for Mortgage starting 1st April?

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11 Mar 2009 00:00 by valeriedixon Star rating. 40 posts Send private message

Hoping to complete on our property very soon. At the moment we are being told the rate will be based on a 12 month euribor of 2.62 but we are not sure what  previous months this is based on.  If 2.62 is our banks 12 month rate for March can anyone predict what it might be when it changes on 1st April as we might then ask to delay until then.

Any idea would bemuch appreciated even if it is only a rough guide.

Thank you.





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12 Mar 2009 21:15 by John 777 Star rating in West Midlands. 109 posts Send private message

Take a look at http://www.euribor-rates.eu it is updated daily and will give you a good idea of which way rates are moving. A number of banks though use an average of historic rates and you would need to know how your lender calculates their own rate.





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13 Mar 2009 01:18 by Smiley Star rating in San Pedro de Alcanta.... 2502 posts Send private message

Smiley´s avatar

Annual Euribor is a fair bit lower than that currently so they are certainly not using todays rates. But as John 777 says lenders usually set a rate that is one or two months prior to the date of completion. There are others that use the prevailing rate on the day and there are some that take an average of the previous 6 or 12 months (at 2.62 it is unlikely your lender is using this method). It is lender specific so you need to ask the bank that is providing the mortgage how they calculate their benchmark.



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13 Mar 2009 08:40 by valeriedixon Star rating. 40 posts Send private message

Thank you for your replies.  Our bank said they base it on the 12 month rate from two months prior to month of completion - I think.  So March would have been based on 12 month rate on1st Jan. Would this make sense?

Thanks.





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13 Mar 2009 09:10 by nfm2862 Star rating in Welling, Kent & Al A.... 1461 posts Send private message

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Yes that does make sense.

It is basically the same as ours where the September 12 month rate is used but the change doesn't take effect until November.

The 12 month Euribor on 2 Jan 2009 was 3.025% compared with 4.733% in January 2008.

That means that the interest on your mortgage will reduce by 1.42 euros per 1000 euros borrowed per month.

Noreen



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