The Euribor is in March at the highest levels recorded since October 2002
The main indicator used in Spain to set the interest rate on mortgages, the Euribor to a year, experienced a sharp increase in March and rose to 3105%, which stood at the highest level since October 2002, according to market data which should confirm the Bank of Spain in mid-April.
In the last month, this indicator has climbed two tenths, but the most important thing for a mortgage holders who have the annual review in the coming weeks is that in the last year has risen by more than seven tenths.
In this way, in the next revision, taking into account a mortgage rate of 120,000 euros to 20 years, will see how the monthly fee for your mortgage is encarecerá in more than 45 euros, which for the whole year represents a rise of 543 euros, almost a full monthly quota. For every 10,000 euro loan to 20 years, the increase is almost 3.8 euros per month and 45.6 euros per year.
And will continue to rise
Analysts consulted explained that the sharp increase recorded in March is because both the European Central Bank (ECB) as the U.S. Federal Reserve (Fed) has raised official interest rates and, most importantly, have announced they intend to to do so again soon.
The Euribor a year reflects market expectations on the situation of interest rates in the euro zone within twelve months and, therefore, how many more hikes are envisaged, both in the EU and the U.S., more increases this indicator.
The immediate response of the Euribor ads rate hikes was evident this week when it increased from 3.11 to 3.23%, after the Fed raised rates to 4.75% and made clear that "may be needed "Further hikes to" keep in balance the potential for achieving sustainable economic growth and price stability. "
Analysts also believe the ECB could raise rates at its meeting in May from 2.5 to 2.75%, after the agency's president, Jean Claude Trichet, has been shown in recent weeks willing to do so.
They also provide for further increases in the months thereafter, until the end of the year between 3.5 and 4%.
With these expectations, the Euribor was now at its highest level since October 2002, 3233%, well above the minimum marking the first day of the month in 2991%.
Faced with the constant stresses that these increases will lead to families in debt, the Council of Ministers today approved several measures to promote fixed rate mortgages or mixed, which are less tied to the evolution of variable Euribor.
The Euribor April 2006 has also begun to rise.
Written by Carlos Lopez on March 31, 2006 with 2 comments
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