The Euribor makes variable interest rate mortgages more expensive for the first time in two years

BarcelonaThe Euribor continues to make mortgages more expensive, one of the consequences of the effects of the war in the Middle East. This indicator, which is the benchmark for variable-interest home loans, but also affects new ones entering the market, closed March at an average of 2.565%, with the largest monthly increase in three years after reaching 2.870% on the last day of the month. As a consequence of this trend, holders of variable-interest mortgages with annual reviews will suffer the first increase in their installments since April 2024 because this month's Euribor is higher than that of a year ago, which was 2.398%.

Markets are pointing towards 3%, which means they anticipate future interest rate hikes by the European Central Bank (ECB) to curb the inflation surge due to the war. In Spain, in March, the consumer price index (CPI) stood at 3.3%, one point higher than the previous month, and in the eurozone, it was 2.5%, six tenths higher than in February. "The market is beginning to price in future interest rate increases to contain the price growth that is already occurring," according to sources from the comparator Kelisto. Miquel Riera, a mortgage analyst at the comparator Helpmycash, states that the March increase "is the largest in magnitude since October 2022".

177.84 euros more per year

In fact, throughout the month, this interest, which refers to the money banks lend to each other, has at times reached the level of 2.9%. As a consequence of this evolution, holders of mortgages that are reviewed annually will see their installments become more expensive. For the average mortgage, standing at 165,677 euros in January, according to the National Statistics Institute (INE), with Euribor plus one point, a monthly installment of 820.38 euros or 9,844.56 annually is paid, and it will now cost 835.20 euros, meaning about 14.82 euros more per month or 177.84 euros more annually, up to 10,022.40 euros. The effect is even worse for holders of mortgages with semi-annual reviews, who have suffered increases since last October.

But the impact of the increases does not only affect those who already have a mortgage, but also those who want to apply for one. In fact, fixed-rate mortgages, which have been the most marketed for months, have already become more expensive. They account for more than two-thirds of all new mortgages sold, and the rest, rather than variable, tend to be mixed, meaning with a fixed term and another variable. CaixaBank, the main financial institution in Spain, states that it has 90% of its mortgages at a fixed rate.

According to Kelisto, at least four entities, Openbank, BBVA, Banco Santander, and ING, have raised the rate on their fixed-interest mortgages. According to data from this comparator, the average interest rate for fixed-rate mortgages in March was 2.883%, compared to 2.823% in February. For mixed mortgages, the fixed period rate was 2.49% (2.50% in February) and the variable rate was 0.75% + Euribor (0.72% in February). And regarding variable-interest mortgages, the initial rate is 0.61% + Euribor, the same as the previous month.

Despite the rise in recent weeks, different research services do not expect a daily one-year Euribor to skyrocket for now. CaixaBank Research estimates that it will stand at 2.23% this year, below the 2.27% for 2025 and above the 2.18% forecast for 2027. Bankinter predicts it will be between 2.3% and 2.45% this year and the same next year. For its part, the foundation of former savings banks (Funcas) forecasts an average of 2.24% for both 2026 and 2027.