The Euribor gives us joy

BarcelonaThe Euribor is approaching 2%. Who would have thought it in January! The economic turmoil and Trump's policies predicted a spike in inflation, interest rates, and consequently, the Euribor, which would have made mortgages even more expensive. However, the twists in the script have resulted in the Euribor reaching its lowest level in the last three years.

Anyone who has their variable-rate mortgage revised in May (and subsequent months) will save money on their payments. The difference in the Euribor compared to last year is 1.6% lower. On an average 25-year, €200,000 mortgage, this represents a monthly saving of around €140 on the payment. This is undoubtedly great news for families.

This reduction is also being felt in housing transactions, where, according to the INE (National Institute of Statistics and Census), there are 20% more transactions per month than a year ago. The bad news is that prices continue to rise. Having access to affordable credit will increase demand, and, as we well know, supply is scarce. But let's not fool ourselves: half of transactions are mortgage-free, and the vast majority are investment transactions.

Recently, a friend with high purchasing power, and with her mortgage approved, was told by the seller that someone else would provide the cash the next day. It's either this or nothing. Finding fixed-rate mortgages on the market at 1.5% or lower is starting to be a great opportunity for those looking to buy a home. Nor should the spreads with the Euribor, taking these rates into account, exceed 0.5%.

That said, given these numbers, my advice would be to take out a fixed-rate mortgage. If not, consider what a Euribor of around 4% would mean. Imagine what could happen 25 years from now: perhaps because we wanted to save 50 euros more on the monthly payment, we end up paying 300 more.