The Euribor makes variable-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 reference for loans to acquire a home with a variable interest rate, but which 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-rate mortgages with annual reviews will suffer the first quota increase since April 2024 because this month's Euribor is above 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 escalation of inflation due to the war. In Spain, in March, the consumer price index (CPI) stood at 3.3%, one point more than the previous month, and that of the eurozone at 2.5%, six tenths more than in February. "The market is beginning to discount 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 rate, which refers to the money banks lend to each other, has reached 2.9% on some days. 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 the Euribor plus one point, a monthly installment of 820.38 euros or 9,844.56 annually is paid, and it will rise to 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 been experiencing 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 take one out. 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 ones sold, and the rest, more than variable, tend to be mixed, meaning with a fixed term and another variable. CaixaBank, the main financial entity 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, it was 2.49% in the fixed period (2.50% in February) and 0.75% + Euribor in the variable period (0.72% in February). And regarding variable interest rate mortgages, the initial rate is 0.61% + Euribor, the same as the previous month.