The Euribor moderates in June but mortgages continue to become more expensive

BarcelonaAfter three consecutive increases (March, April, and May), the daily one-year Euribor in June, the main reference for variable interest rate mortgages, has moderated and experienced a slight decrease compared to the previous month. The indicator closed the month at 2.728%, and therefore, an average in June of 2.798%, below the 2.8% of the previous month. In any case, the amount paid by mortgagors will continue to rise, with an increase of 66.40 euros per month and 796.8 euros per year on average, as it is compared to the 2.081% that existed a year ago.

This evolution "points to a phase of stabilization after the sharp increases of previous months, although a consolidated downward trend is not yet foreseeable," according to the comparator Kelisto. The moderation in this variable has to do with the decision of the European Central Bank (ECB) on June 11, when it raised interest rates by 0.25 points, to 2.25%. This resolved one of the issues that the markets were awaiting, which was the increase in the price of money.

"The Euribor has stopped accelerating. We came from three months of a lot of pressure, with a market very sensitive to inflation, energy prices, and the conflict in the Middle East, but in June we saw a pause. I would not speak of relief for mortgagors, but of stabilization," says the CEO of RN Tu Solución Hipotecaria, Ricardo Gulias.

In any case, the upward trend in variable-rate mortgage payments does not only affect those who already have this type of loan. In June, banks continued to increase the cost of their offerings, especially fixed-rate mortgages, which are the most sought after.

According to Kelisto, some entities, such as Ibercaja and Unicaja, "applied increases immediately after the ECB raised rates on June 11". The average spread applied to variable-interest mortgages in June is 0.63, compared to 0.62 in May, and the average interest rate for fixed-interest loans is 2.94%, compared to 2.932% the previous month. Regarding mixed mortgages, the rate in the fixed period has gone from 2.55% to 2.58%, and the spread in the variable period has remained at 0.78%.

Possible new rate hike

Inflation in the euro area stood at 3.2% in May, and the ECB expects it to reach an average of 3% this year, clearly above the 2% target. Everything depends on the evolution of the conflict in Iran and oil prices. "If energy prices remain contained and the truce progresses, it is more than likely that the ECB will not raise rates again on July 22. However, markets continue to price in another 25 basis point hike before the end of the year, which could occur in September or at a later meeting," say Kelisto analysts.

The forecast for Euribor for 2026 made by various entities and research services has been changing according to the evolution of the war conflict in Iran and is now situated in a range between 2.3% and 2.89% for the end of this year.