The Euribor rises to 1.2% after the ECB rate hike

At the end of last year it was at -0.5%

Jose Maria Waiter

The 12-month Euribor has made a new jump and stood at 1.2% in its daily rate this Friday, after the European Central Bank (ECB) surprised with a higher-than-expected rise in interest rates. It is the first reaction of the market after the announcement of the central bank. The ECB thus agreed to an increase in the price of money greater than what it had advanced in recent weeks, when several members of the Executive Committee indicated that the rise would be 25 basis points.

Experts have warned that this rise in interest rates will have an impact on the Euribor, which will likely continue to rise and make variable-rate mortgages more expensive.

The advance of the Euribor has already been noticed just one day after the announcement of the ECB. This Friday, the indicator stood at 1.2% in its daily rate, compared to 1.142% that marked the previous day. This is the highest daily level since early July 2012.

The ECB surprises with a 0.5% rate hike as inflation risks worsen

The index thus chains six consecutive days above 1%, which allows us to anticipate that a monthly rise will be noted again and will exceed in July the monthly figure of 0.852% marked in June. With a week to go until the end of the month, the provisional average for July stands at 0.985%.

The rise in the Euribor is making variable-rate mortgages more expensive. According to the estimates of the real estate portal piso.com, there will be an increase of approximately 1,400 euros on average per year per family, which will mean an increase in the monthly mortgage payment of between 115 and 120 euros.

Most experts agree that the indicator will close this year above 1.5% and will approach or exceed 2% in 2023, although various analysis and investment houses see it as possible for the Euribor to reach 2% in the next six months.

Although the rise does not affect fixed-rate mortgages, the comparator warns that those who wish to contract this type of product will have to accept higher prices than those offered by banks.

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