Madrid (EFE) of the fluctuations registered after the banking crisis.
The strong oscillations that the Euribor has registered in March have caused it to rise less intensely than in previous months and, for the moment, it has moved away from the 4% rate that, according to experts predicted, it would exceed this month.
On March 9, the Euribor reached a daily value of 3.978%, the highest since 2008, after the president of the US Federal Reserve (Fed), Jerome Powell, stated that the institution was prepared to accelerate rate hikes if the economic data warranted it.
The president of the European Central Bank (ECB), Christine Lagarde, had also assured in previous days that interest rates would rise in March and in the following months.
banking crisis
But that March 9 alarm bells went off in the US after the collapse of the Silicon Valley Bank. Fear of possible contagion in the sector plunged stock markets around the world.
Days later, another bank in the US, Signature Bank, also went bankrupt and a third party, First Republic Bank, was rescued, while the Swiss company Credit Suisse was bought by UBS with the backing of the authorities.
As a result of the banking crisis, the stock markets collapsed and investors fled to values considered a refuge such as fixed income.
This caused the price of the bonds to rise, the drop in their profitability, and a downward movement of the Euribor, which in those days fell to its lowest since January, at a daily rate of 3.322%.
In this context, the market anticipated that central banks would have to ease their monetary policy.
However, and despite the financial turmoil, the ECB maintained its roadmap and on the 16th raised interest rates by 50 basis points, while the Fed raised them by 25 basis points on March 23.
After the rise in the price of money and the calm in the banking sector, the Euribor has risen again, and has closed the month at a daily rate of 3.622%.
The average monthly value, the one used to review mortgages, ended at 3.647%, compared to 3.534% in February. The rise in March was 113 basis points, the lowest since the same month last year.
The evolution will depend on inflation and confidence in the sector
The co-founder of the financial comparator HelpMyCash.com, Olivia Feldman, explains that after the Euribor stagnated in March, its evolution will depend on inflation in the euro area and confidence in the financial sector.
“If inflation continues to skyrocket, it is very likely that the ECB will keep raising its rates, which will increase the value of this mortgage index. On the other hand, if inflation is greatly reduced or a banking crisis occurs (something unlikely today), the body will soften its policy and the Euribor will stagnate.
Despite a more moderate rise in March, the variable mortgages that have to be reviewed with this month’s data will increase again, since a year ago the Euribor was still negative, at -0.237%.
As an example, for a mortgage with an average amount of 142,654 euros (January data from the National Institute of Statistics, INE) with a term of 25 years and a Euribor plus 1% interest, the fee amounts to 804.9 euros per month. .
Compared to March 2022, this means an increase of 282 euros per month and 3,389 euros per year.
In the case of a mortgage of 300,000 euros, with the same conditions, the increase will be about 593 euros.
