Analysis of the Behavior of the Euribor and Its Impact on Mortgages
<h4>1. Euribor Drop Mortgage Payment Reductions</h4>
The Euribor, a reference index for most mortgages in Spain, is showing a downward trend in May 2024, provisionally falling below 3.7%. This decline represents the largest year-on-year drop since June 2021 and has significant implications for mortgage payments.
<h4>2. <strong>Comparison with Previous Increases</strong></h4>
<ul>
<li><strong>2023: Year of Aggressive Increases</strong>: In 2023, mortgages experienced significant increases due to Euribor hikes, with differentials of up to 4 percentage points compared to the previous year. This context of aggressive increases resulted in monthly increases of between 100 and 250 euros in mortgage payments.</li>
<li><strong>2024: Year of Relief</strong>: In contrast, 2024 is showing a relief trend for mortgage holders. Since January 2024, payments have stabilized, and April 2024 marked a turning point with a slight decline.</li>
</ul>
<h4>3. <strong>Key Data for May 2024</strong></h4>
<ul>
<li><strong>May 2024 Projection</strong>: The Euribor is expected to close May around 3.658%, representing a decline from 3.862% in May 2023. If this projection is confirmed, the differential would be -0.204 percentage points.</li>
<li><strong>Comparison with May 2023</strong>: The provisional average for May 2024 is 3.66%, compared to 3.939% in May 2023, implying a decrease of 0.276 percentage points, the most significant since June 2021.</li>
</ul>
<h4>4. <strong>Impact on Variable Rate Mortgages</strong></h4>
<ul>
<li><strong>Annual Review</strong>: Mortgages with an annual review in May will see a reduction in their payments. For example, for a 140,000-euro mortgage over 30 years, with a 1% differential, the monthly payment would drop from 739.79 euros (May 2023) to 687.53 euros (May 2024), a decrease of approximately 50 euros per month.</li>
<li><strong>Six-Month Review</strong>: For mortgages with a six-month review, the situation is different. Those who review in May based on the December Euribor (3.513%) will see an increase, as the average for May 2024 is expected to be higher (3.658%). This would result in an increase of about 25 euros per month in the payment.</li>
</ul>
<h4>5. <strong>Future Outlook</strong></h4>
<ul>
<li><strong>Downward Trend</strong>: The Euribor is anticipated to continue its downward trend in the coming months, benefiting mortgage holders with continuous reductions in payments until the end of the year.</li>
<li><strong>Continued Impact</strong>: This downward trend will continue to provide relief to mortgage holders, although the reductions in payments will not be as drastic as the increases experienced in 2023.</li>
</ul>
<h3>Conclusion</h3>
The drop in the Euribor in May 2024 represents a breath of fresh air for mortgage holders, especially those with annual reviews, who will see a significant reduction in their payments. However, those with six-month reviews in May will not experience the same decrease due to the Euribor’s behavior in December 2023. The general trend suggests continued relief for mortgage holders throughout the year, in contrast to the sharp increases of the previous year.
La Casa Das Haus Inmobiliaria in <a href=”http://www.lloret.cat”>Lloret de Mar</a> is enthusiastically observing how the market is providing relief to both new investors and those who have already made investments and are paying off their mortgages. With the Euribor falling below 3.7% in May 2024, homeowners can expect a significant reduction in their mortgage payments, improving their financial outlook and fostering a more favorable environment for future investments.
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