As the Euribor, a reference index used to calculate variable mortgages, closes May above 3.68%, it’s not yet time for homeowners to relax their belts and take a deep breath. While this marks a three-month decline and lows in February, it’s not enough to make a significant difference in the pockets of mortgage holders. However, there is hope on the horizon with an upcoming ECB meeting on June 6 where an interest rate reduction is expected.
The European Central Bank is set to reduce rates from their current level of 4.5% to 4.25%, marking the first interest rate reduction in this new stage that began two years ago. This reduction will impact Spanish mortgage holders by generating modest savings of about 15-30 euros per month, depending on the amount of their mortgage. Platform calculations suggest an annual savings between 180 and 360 euros.
Looking ahead, ASUFIN anticipates further decline in the Euribor to reach 3% by the end of the year, resulting in larger savings for mortgage holders. Their estimates suggest that for every 100,000 euros of mortgage, homeowners can save around 450 euros per year. ASUFIN also recommends exploring alternative options such as changing entities or mortgage types to maximize savings potential. Fixed mortgages below 3% TIN and mixed mortgages around 2% TIN are options worth considering for those seeking lower interest rates.
