The Euribor, the main mortgage reference in Spain, is clearly moving downwards at the end of November and will make mortgages significantly cheaper starting this month. In fact, the closing mark, On the last day of the month, it stands at 2.461%a level already clearly lower than the average for the eleventh month of the year.
This is a significant cut that leaves historical levels, with the lowest since September 2022 for this indicator and sharply lowers its path compared to the average reached in September: the close at 2.506% is clearly reduced compared to 2.691 marked last October. It also reflects the biggest year-on-year drop in the Euribor in 15 years.
The main consequence is more than positive for those mortgaged for 12 months who have an annual review of their mortgage: and that for a loan for the purchase of an average home, of 150,000 euros for a 25-year term, and a differential that adds at the Euribor of 1%, The monthly fee is reduced by just over 127 euros, which in the year slightly exceeds the 1,520 euros of savingscompared to what I paid a year ago.
The reasons for the cut are clear. The ECB has lowered rates and intends, given the weakness of growth in the eurozone, to continue raising this cut, which has even been talked about among market experts, of it being deeper to reactivate the GDP of the eurozone partners. the single currency.
However, there are several risks in the environment: one of them comes from Donald Trump’s potential tariffs on European exports to the US, which could have an impact, while it also seems that the Fed’s lowering of rates, with a growth dynamic very different American, could slow further declines in 2025already with the president-elect in the White House.
Added to this are inflation levels. This week we learned that inflation in the eurozone in November, in advance data, has reached 2.3%, its highest rate since last July.
This is also the second consecutive increase that has occurred in the price indicator, with a general increase in all countries, as the ECB has already announced as a risk. With higher prices, it is more difficult for steeper rate cuts in the eurozone to occur.
For market analyst Manuel Pinto «we continue to think that Interest rates should fall to levels of 1.50% to 1.75% by the end of 2025which would generate a significant drop in the Euribor during the next year. In the remainder of this year we hope that it can still fall to levels close to 2.30%, with the ECB meeting on December 12 being the key event of the coming weeks.
«We expect a rate cut of 25 basis points, something already discounted in the market, however, we believe that the most relevant thing will be the downward revision of economic growth projections, which would imply a more aggressive cuts program than expected, driving down the Euribor. Regarding inflation, the latest increases were expected by the market, while service inflation, which is the most dependent on the labor market, has begun to relax,» indicates the expert.
He also points out that «bad economic data has intensified in recent weeks, as has happened with PMIs or investor confidence, and political instability has been increasing little by little in the two main powers in the region. The case from France, confirms our view of the few current tools that exist to stimulate growth, which leaves the ECB as the main driver in the common zone.»