The 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%.

The armed conflict in the Middle East also has financial repercussions. The Euribor, the benchmark for variable-rate mortgages, registered its largest daily increase in almost 20 years on Tuesday. This one-year indicator climbed to 2.552%, an increase of 0.185 percentage points. Normally, this benchmark fluctuates by only a few thousandths of a point daily, but this time it experienced a 7.8% rise in a single day.

September 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%).

The one-year Euribor, the main benchmark for variable-rate mortgages, registered its first increase since January in August, closing at an average of 2.114%, compared to 2.079% in July. However, variable-rate loans for home purchases will continue to decline, as this benchmark is still below what it was a year ago (3.166%). With this trend, with this Friday's index at 2.119%, it is expected that the high rate of mortgage granting, which reached its highest level in fifteen years, will continue.

The UK Supreme Court on Wednesday overturned the conviction of Tom Hayes, a former UBS and Citigroup trader who became the first banker convicted worldwide of manipulating the London Interbank Offered Rate (LIBOR), a key index used to set interest rates on millions of loans and mortgages. Hayes was sentenced in 2015 to 14 years in prison—later reduced to 11—for conspiracy to defraud, and served five and a half years before being released on parole.

The 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.

The one-year Euribor, the benchmark for variable-rate mortgages, closed May at an average of 2.081%, compared to 2.143% in April. It thus falls to the level of August 2022, just months after emerging from the negative territory it had held for six years. The fall in this index, which could continue to fall below 2% by the end of the year, according to expert estimates, has the positive effect of lowering the payments for those linked to it and also the interest rate at which new loans are offered. The most immediate effect is that a typical 25-year mortgage of €156,698 (the one collected by the National Statistics Institute for March) with a spread of the Euribor plus one percentage point, will go from having a monthly payment of €887.07 to €749.70, a reduction of €1,648.44.

Demand for credit, especially mortgages, will continue to rise in the coming months, according to bank forecasts. In the period from January to March of this year, it already experienced a significant increase for the fourth consecutive quarter, thanks to the downward trend in the Euribor, the main benchmark for variable-rate mortgages, and the relaxation of conditions imposed by financial institutions.

The data is grim. According to the financial association Asufin, only 14% of mortgages granted are for a primary residence, and 56% are used as an investment. Furthermore, nearly half of all purchases are made without any type of loan. As mortgage payers, what can we expect in the coming months?