The Brexit pushes the Euribor lows and cut back the mortgage

04/08/2016

Again, good news for thousands of mortgaged. Euribor index that are referenced most mortgages in Spain, dismissed June in negative territory (in -0.028%) and makes for the fifth consecutive month, giving a new joy to thousands of mortgaged. The indicator has sunk to a monthly rate -0.013%, marking record lows since its inception in January 1999. The index has accentuated the fall after the triumph of Brexit in the UK.
To give us an idea, on June 23, when all the British were called to vote or stay out of the European Union, the Euribor sent away the day at -0.029%. A day later, after learning of the decision of the referendum, the fall was accentuated to -0.047%, to reach the -0.051% Thursday.
Thus, for a mortgage of 120,000 euros to 20 years and Euribor + 2% to 30 years to touch review with the end of June will have a reduction in their monthly fee of 12 euros per month, about 144 euros per year. For a loan of 150,000 euros, the savings will be about 168 euros per year (14 euros per month), and for a mortgage of 180,000 euros, the reduction of the quota will be around 18 euros per month, 216 euros per year.
Euribor losing streak began in July 2015 to fall for the first time in its history below 0% in February. Since March, the indicator was stable below 0%, but the triumph of Brexit has pushed back downward, which, at least in the short term, continue lowering the mortgage payment of thousands of families.
However, for new hypothecated, experts say that the Euribor is touching the ground and that eventually end up, so we recommend studying offers fixed rate of banks, which have finally managed to break. In fact, according to data from April INE, 14.8% of mortgages in April was fixed rate, an unprecedented since these data are recorded.
Speaking to Europa Press, XTB analyst Jaime Díez stresses that the index has reported a stable trend throughout the month of May, which contrasts with the sustained volatility during 2015 and the first months of this year. "This strengthens the idea of soil formation in the index."
He adds that "with the current situation, we can not but expect the current behavior of laterality is maintained, since the oil appears to have stabilized and the ECB could not take more monetary policies if you see the Fed take the initiative on the rise types indirectly leaving a weaker euro, "he explained.
A setback for banking
However, although a euríbor settled in negative territory is benefiting thousands of mortgaged, seriously hurts the banks, which assists dumbfounded to a strong narrowing of margins. Recently, the BBVA chairman Francisco Gonzalez, admitted that ultralaxa ECB policy is "killing" banking, although it seems that the 'timing' to normalize interest rates is "unpredictable" in the words of the governor of the Bank of Spain, Luis María Linde. The index closed February at -0.008% -0.012% in March, April and May the -0.010% in -0.013%.
Aware of the damage that makes them a euríbor below 0%, banks keep focusing months in a real offensive fixed rate mortgages for at least ensured a positive interest and build their structures with a greater degree of stability and visibility. A policy already allows to see on the market fixed rates below 2% at 15 years and between 2% and 2.5% for 20 years or more.
Betting on fixed rate
Just this week, Gonzalo Bernardos, economist and director of the Real Estate Master of the University of Barcelona, he asserted, within the Fotocasa Academy, which in the current policy of the ECB, likely to change in the medium term, it is advisable to sign a mortgage whose interest fixed rate would be offset by a controlled inflation. That is, almost no interest on the borrowed money would be paid.
Since the Agency Negotiator also opt for the fixed rate and calculated that 30% of those who have formalized a mortgage in the past two years can not cope without problems a rise in interest rates on their loans.
According to calculations by the Observatory of the Family Financing Company if the Euribor climbed to 4% would mean an increase in the monthly fee of 400 euros on a mortgage of 200,000 euros to 20 years, from 934 euros 1,319 euros per month, ie 43.5% more. In annual terms, the increase would be 4,620 euros.
Let us not forget that while the indicator is at minimum, the historical average is 2.4% and in the summer of 2008 got to reach 5.4%.