Euribor slows its progression and closes July below 1%

The euribor At 12 months, July closed on a monthly average of 0.992%, above the 0.852% recorded in June, thus continuing the bullish trend started at the beginning of 2022, although the data shows that the indicator has slowed its progress in course of the last few months.

Euribor is up nearly 1.5 points from a year ago, when it averaged -0.491%, the biggest one-year rise to date. However, the indicator has shown slight signs of moderating in its growth over the past month, as after posting the largest monthly increase in its history in June, it advanced only 0.14 points in July. , refusing to cross the 1% mark.

Euribor’s highest daily value was on July 22, after the European Central Bank (ECB) announced to raise interest rates by 50 basis points, above the 25-point hike advanced basis points in recent weeks. That day, the indicator stood at 1.2%.

However, in the days that followed, it fell back to levels before rumors of the ECB’s intention to raise rates more than expected. Last Friday, the last working day of the month, the Euribor marked a value of 0.921%.

With a monthly average of 0.992% in July, a person who took out a 30-year variable mortgage loan of 150,000 euros and with a differential of 0.99% plus Euribor, will experience an increase in their monthly mortgage payment of 100.77 euros, in other words, he would go from paying 448.72 euros per month to paying 549.49 euros for the revision, which is equivalent to an increase of 1,209.24 euros per year.

HelpMyCash experts point out that, as the ECB is expected to continue raising interest rates to contain inflation, Euribor will remain on the rise until at least the end of 2022. According to Bankinter’s analysis department, the value of this index will be 1.90%. in December and 2.20% in 2023, while Asufin expects it to be 1.50% at the end of 2022 and 1.90% for the year.

Mortgage Director at iAhorro, Simone Colombelli, acknowledges that the ECB rate hike will affect citizens who want to apply for a new mortgage, especially if they want it at a fixed rate, since it will cost banks more to finance itself and, presumably, these costs will be passed on to users.

“Entities will increase the interest rates of their offerings to the same extent and this effect will surely be noticed immediately,” Colombelli warned.

Regarding variable mortgages, the mortgage manager at iAhorro anticipates that the current offer will be maintained or improved. Of course, he makes it clear that anyone who has a variable mortgage and needs to revise it now, will experience a significant increase in out-of-pocket costs whether the review is six months or twelve months. – European press

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Bank tax negotiation

Optimism. The Minister of Finance and Deputy Secretary General of the PSOE, María Jesús Montero, does not rule out reaching an agreement with the PP to approve the new bank tax, and also hopes to reach an agreement with the PNV. In an interview with La Vanguardia published yesterday, Montero maintained that the leader of the PP, Alberto Núñez Feijóo, has not yet opposed it: “I have no reason to think that the PP does not believe that it is appropriate to ask for a greater effort from those who can have more advantages.” Moreover, Montero has “no doubts about the ERC and the leftist groups. I am convinced that they will support it because they have always asked us for more tax efforts on the part of large companies”.

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