29 Dec, 2023 @ 12:00
1 min read

Good news if you have a variable-rate mortgage on a property in Spain

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SOME much-needed relief for variable-rate mortgage holders in Spain is coming after a fall in the Euribor index- the benchmark for fixing interest on most variable repayments.

The Euribor will close December at around 3.688% after registering the largest monthly decline in the last 14 years.

After more than 18 months of continuous rises since the European Central Bank (ECB) began to encourage rate hikes in the Eurozone to fight rising inflation, the Euribor index has now dropped below 4% in its monthly average figure.

Its believed that that central banks will start to loosen interest rates sometime next year, but it is too soon to predict exactly when, according to experts.

“The fall in the Euribor confirms a change in trend, but we have to be cautious as it will most likely remain at around 3% for quite a few months before continuing its decline,” says Simone Colombelli, director of Mortgages at the financial comparison site iAhorro.

The December decrease impacts on people who have a variable mortgage and are scheduled to have a payment review this month.

Those who have a six-monthly review as part of their loan deal should see their monthly payments drop between €30 and €60 euros depending on the amount of the mortgage.

People with an annual review will have to wait longer.

Regarding medium- and long-term prospects, analysts say that the pressure on mortgage holders will definitely ease.

Asufi the Association of Financial Users- expect the Euribor figure March could stand at 3.30%; June at 3%, and September on 2.8%.

“By the end of next year we could see a Euribor rate of 2.6%,” they suggest.

Manuel Pinto, analyst at XTB said: “The Euribor will continue to fall in the coming weeks, thanks to the downward trend in inflation derived from lower demand and future decisions of central banks, in order to stimulate the economy.”

“It would not be surprising if the benchmark interest rate falls to levels close to 2% over the course of the year,” he predicted.


Alex Trelinski

Alex worked for 30 years for the BBC as a presenter, producer and manager. He covered a variety of areas specialising in sport, news and politics. After moving to the Costa Blanca over a decade ago, he edited a newspaper for 5 years and worked on local radio.

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