For the third consecutive month Euribor The 12-month term appears to end in June, raising hopes for European borrowers mortgage loans with a variable interest rate to reduce your dose.
Although the European Central Bank’s 25 basis point interest rate cut has had limited impact, five meetings before the end of the month, the 12-month Euribor stands at 3.674%, compared to 3.68% in May. The index fell to 3.703% in April and closed May at 3.680%.
For the record, in June 2023 the 12-month Euribor stood at 4.007%.
The 12-month Euribor is the most used indicator to calculate floating rate mortgages in the eurozone.
However, the index started the year at 3.609% in January, rising to 3.671% in February and 3.718% in March.
Over the past three months, Euribor has begun a downward trend due to forecasts of interest rate cuts in Europe.
Since Euribor’s dizzying start at the end of 2022, the index has caused increase in mortgage installments and serious economic impact on millions of families in Europe.
Banks continue to make their mortgage loan offers more flexible and extend terms, so that more European citizens feel confident in buying a home through loans. “As interest rates falla, the conditions for loan ibecome more accessible and stable againS.
The direction of the ECB
The amount of Euribor fall will depend on what the ECB decides and how the confrontation between hawks and doves plays out, but also on how inflation and economic growth will continue to unfold across Europe.
“We are in a crucial moment for domestic economies. Much will depend on the behavior of the various economic variables, until the end of this year”, emphasize market players in Nautemboriki.
On June 6, the Governing Council cut interest rates for the first time since March 2016.
however, he avoided charting a clear course for the rest of the year.
The euro zone central bank even increased its average inflation forecasts to 2.5% in 2024 and 2.2% in 2025, two tenths above previous forecasts. In 2026, inflation will finally fall to 1.9%, reaching the ECB’s target.
Analyst forecasts range from those expecting two rate cuts this year to none, to those expecting a single cut, probably in December.
How will Euribor evolve?
In this context, analysts’ opinion on the future evolution of Euribor they do not match.
Juan José del Valle, head of analysis at broker Activotrade, believes that, following the ECB’s latest inflation forecasts, mortgage rates such as Euribor will not be significantly cut.
On the contrary, Ricardo Gulias, CEO of the financial firm RN Tu Solution Hipotecaria, believes that “After the summer season” we will begin to see “more pronounced falls in Euribor”.