The Euribor consolidates the increases and opens May above 0.2%

The simple expectation that the European Central Bank (ECB) will be forced to raise interest rates sooner rather than later -there is even talk of July- has caused the Euribor to react upwards to return the indicator to positive territory, from which, in a situation of economic normality, it should never have left.

The 12-month Euribor, the index to which most mortgages in Spain are referenced, has already ended April with a positive average of 0.013%. It is the first time in six years that he did. And everything indicates that May will repeat the trend, after starting the month with a daily rate soaring 47 thousandths, going from 0.166% to 0.213%.

To get an idea of ​​the evolution, we must take into account that in March the average was around -0.237%. And in December at -0.50%. Some analysts such as those of Bankinter even see the indicator hovering around 0.40% in December 2022 and 0.80% in 2023.

With a rise in the index such as the current one, which has risen approximately half a percentage point in the last year, it can mean an increase in mortgage payments that would be between 170 and 350 euros per year, with the closing data for April. Although the amount will always depend on the time of the mortgage review and the differential applied to the loan, as well as whether it is fixed or variable.

At the moment, all the entities have begun to make a move to adjust their mortgage offer to the new reality. And the general action is to make fixed-rate mortgages more expensive, which until now have dominated the bank window, to make the variables more attractive to the customer.

In any case, the current offer continues to be much more attractive for fixed rates, which already account for 70.4% of the new loans signed – maximums never seen – compared to 29.6% of the variables, according to the latest public data of the National Institute of Statistics (INE). But the financial institutions anticipate that the situation will change if the upward trend of the Euribor continues.

In any case, the benefits that can be derived from it, after years of negative rates pressing the margins of the sector, will not be noticed in the short term. As explained last week by Leopoldo Alvear, financial director of Banco Sabadell, the rise in the Euribor will have a positive impact that will only be reflected from 2023.

During the presentation of results, the entity explained that, in general, mortgages are repriced with a two-month lag. In other words, in April the Euribor ratios of February would have been applied, when the indicator was still at -0.4%. And the positive data from last April would already be applied in June, with which there would only be half a year left to collect the results of the return to normality in terms of interest rates.