The Euribor skyrockets and makes mortgages more than 400 euros on average per year

Theresa Sanchez VincentFOLLOW, CONTINUE
Updated: 05/10/2022 14:27h

The market is already discounting the next increases in interest rates with the consequent push for the Euribor to rise. The most used indicator to calculate mortgages in Spain
closed last April at 0.013% and registered its first positive rate in six years
. With signs of continuing to rise in the coming months and moving away from the minimum marked in January 2021 (-0.505%), families with variable mortgages and who have to review their credit with the April figure will be forced to pay around 400 additional euros per year depending on the conditions of each contract.

Based on calculations by the Negotiating Agency, in the case of a mortgage of 150,000 euros over thirty years with the Euribor plus a differential of 1.5%, the increase will be around 35 euros per month or around 420 euros more per year.

In this same example, the monthly installments would thus go from the previous 483 euros to about 518 euros after the review of the previous month.

Based on the previous example of a mortgage, Ricard Garriga, CEO of Trioteca, recalls that in December 2021, with an Euribor of -0.502%, the monthly fee reached 450 euros. "Now, with the rise to positive rates in April and the Euribor at 0.013%, that user will have their monthly fee raised to 485 euros."

And what would happen if we returned to the interest rates of 2011 with a Euribor of +2% or to 2008 with a Euribor of +5%? From Trioteca they advance that the same mortgage with the 2011 rates would be 634 euros per month. With the 2008 figures, the fees would amount to 902 euros per month, more than double that of 2021.

Change to fixed rate

One option to resort to to avoid these increases is to switch to the fixed rate. "A priori, and with an expectation of a rate hike, it is the right time to do it, because there is still a very competitive offer at a fixed rate, and it will not last long," recommends Luis Javaloyes, CEO of Agencia Negociadora. But, Javaloyes warns that before you have to compare: «We will have to see what differential it has, the fixed rate that is offered, if it has cancellation, subrogation or novation commissions, etc., and from there make the comparison».

Although the variable mortgage may be a good option for families who plan to repay short-term installments, the recommendations depend on each case. In fact, for those with constant income, experts advise taking out a fixed-rate mortgage. As reported by Garriga, from Trioteca, there are several possibilities to improve the conditions of the loan, such as applying subrogation or canceling and formalizing a new mortgage, a bet with which you can save up to 2,800 euros a year. However, the CEO of Trioteca points out that the bank can apply a commission whose amount varies depending on whether it is a cancellation or partial early repayment or if it is total.

For consumers who are going to sign a loan now, Rastreator's mortgage manager, Sergio Carvajal, urges them to review the differential applied by the entity in order to get it cheaper. "Depending on which cases we can still get fixed rates below 1.75%, so it could mean good savings in the event that the Euribor continues to rise," explains Carvajal. For those who already have it at a variable rate, the Rastreator expert recommends reviewing the differential and the term that remains to be paid in order to assess the possibility of changing to a fixed rate.

More than 580 additional euros if it is revised in May

Calculations for a mortgage of 150,000 euros at 30 years with an interest of Euribor plus 1%, according to the comparator Helpmycash.

-If the mortgage is reviewed with the April Euribor (0.013%):

With annual review: the fee rises from 449.84 euros to 483.36 euros. They are 33.52 euros more per month and 402.24 euros more per year.

With six-monthly review: the fee rises from 450.30 euros to 483.36 euros. They are 33.06 euros more per month and 198.36 euros more per semester.

If the mortgage is reviewed with the provisional Euribor for May (0.234%):

With annual review: the fee rises from 450.04 euros to 498.75 euros. They are 48.71 euros more per month and 584.52 euros more per year.

With six-monthly review: the fee rises from 449.64 euros to 498.75 euros. They are 49.11 euros more per month and 294.66 euros more per semester.

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