Why is the Euribor rising but mortgages continuing to get cheaper?
The indicator closes for the second consecutive month on the rise, but loans under review will still save an average of 805 euros per year.
BarcelonaSeptember ends with the second consecutive increase in the Euribor and the third of the year (the other was in January), but that won't mean that variable-rate mortgages, those that are indexed, will become more expensive. The one-year daily Euribor, the indicator used by most variable-rate home loans, stood at 2.193% this Tuesday, bringing the average for the month to 2.172%, higher than August's (2.114%).
This will be noticed by those who are going to apply for a new mortgage. However, those who already have one will pay approximately €67.12 less per month, taking as a reference the average loan in July, which was €163,307 for 25 years. If the revision is annual, the monthly payment will go from €856.23 to €789.11, which represents a saving of €805.44 per year.
Why is it going up?
The upward trend is related to the evolution of interest rates set by the European Central Bank (ECB). maintained the price of money for the second consecutive meeting after its September 11 meeting. This broke a year-long downward trend, as ECB President Christine Lagarde hinted that these could continue at upcoming meetings. For the remainder of the year, the decisions will be made on the 30th of this month and December 18.
Why do interest rates keep falling?
There is a downside, which is the rise in the Euribor compared to previous months. But the positive side is that it remains below the benchmark rate set a year ago (2.936%) and six months ago (2.398%). As a result, the rate for those with variable-rate mortgages will continue to fall when revised, whether annual or semiannual. If there are no major fluctuations in the three months remaining in 2025, variable-rate mortgages will continue to become cheaper, but at a slower pace.
Has the trend changed?
Although it's not detrimental to mortgage holders, Miquel Riera, analyst at the comparison site HelpMyCash, assures that the Euribor has changed trend. "This index had been registering declines for over a year and, in fact, fell from 2.525% to 2.079% between January and July 2025," he explains, but in August there was a turning point: "the Euribor rose slightly, from 2.079% to 2, a slight rebound." And this change in trend is due to the ECB's new interest rate policy.
The Euribor is the interest rate at which major European banks lend money to each other and is closely related to the rates the ECB applies to the loans it grants to financial institutions: if these rates rise, the Euribor rises, while it falls if they fall, says Riera. But not everyone sees it the same way. For Ricard Garriga, CEO of the intermediary Trioteca, the change of direction is more a response to a "technical rebound" than a reversal of trend. "The market had priced in a faster and more aggressive rate cut than the ECB is ultimately willing to make," he points out. "Inflation remains more resilient than expected, and the latest macroeconomic data do not allow for accelerating the process. Added to this are liquidity factors that tend to move the Euribor in the short term," he clarifies.
Why are new mortgages taking out soaring?
The latest data show that Mortgage takings are at record levels. "The recovery is due, above all, to the fact that financing is once again cheaper and banks are competing aggressively to obtain mortgages. The ECB's interest rate cuts have given banks room to make loans cheaper, and from there, competition is unleashed: with lower financing costs, banks adjust prices to win," co-founder of HelpMyCash. "The downside is that financing becomes easier, demand increases and, therefore, prices continue to rise.
What developments can we expect?"
Looking ahead to the end of the quarter, and the year, Trioteca forecasts the one-year daily Euribor rate between 2.05% and 2.25%, a far cry from the 2.93% rate seen a year ago. Funcas estimates it will be around 2%. Bankinter estimates the year will close with the Euribor between 2.15% and 2.20%. This means that variable-rate mortgages will continue to decline, as they closed at 2.436% in December of last year.