The ECB suggested further increases in rates

The president of the European Central Bank (ECB), Jean Claude Trichet, appeared today in the European Parliament. The banker claimed to MEPs that growth and inflation in the euro zone remain strong, thus leaving the door open for future increases in fees.

"Economic growth is widening and becoming increasingly sustainable," said Trichet before the committee for economic and monetary affairs of the European parliament. At the same time, he noted that "inflation will remain high in coming years," that interest rates "remain low" and that monetary policy in the euro area remains accommodative. "

Faced with this situation, Trichet EU moved to the camera that "continue doing whatever is needed to contain inflation and to anchor inflationary expectations."

At the last meeting of the ECB, which was held in Madrid and in which rose 0.25% the price of money up 2.75%, Trichet has already suggested that there would be further increases in rates in the future. "If our forecasts for growth and inflation are confirmed, it will be necessary to reduce the laxity of monetary policy," Trichet said.

The futures market on the Euribor two other discounted rate increases: one at the end of August, and another 3% in December, up 3.25%, and further increases in 2007, reaching 3.5% or 3.75%.

Recall that mortgages are often Euribor.

Written by Carlos Lopez on June 22, 2006 with 6 comments
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Will 100 years?. Never

One of the urban legends (and even published in some media) is the way to fight the high price of housing mortgages to "heritable" of 75-100 years. This possibility is completely ruled out in an economic environment like the present.

Let's see some examples, why not get these mortgages.

Consider, € 350,000 mortgage at 4%.

40 years -> € 1462.78 per month
50 years -> 1.350 €
60 years -> 1283 €
75 years -> 1228 €
100 -> 1188 €
1000 years -> 1166 €

Savings of 162 € a month if the raisins from 50 to 100 years

5% interest

40 years -> 1687 €
50 years -> 1589 €
60 years -> 1535 €
75 years -> 1493 €
100 -> 1468 €
1000 years-> 1458 €

Savings of 121 € to move from 50 to 100 years

6% interest

40 years -> 1925 €
50 years -> 1842 €
60 years -> 1799 €
75 years -> 1769 €
100 -> 1754 €
1000 years -> 1750 €

Savings of 90 € to move from 50 to 100 years.

An interest rate of 6% Euribor supposed to 5.3 (Summer-Fall 2000) and apply a differential of 0.7.

Do you think it is worth mortgaged over 50 years, to save around 10% in the monthly fee?

Written by Carlos Lopez on June 22, 2006 with 26 comments
Read more articles on Euribor.