The indicator, which closed August with the best data of the month, rises again above 3.1% after four consecutive days of declines. As a result, most variable-rate mortgages in Spain that renew with the September data will see their monthly payments decrease.
On Tuesday, September 3rd, the Euribor increased by 0.041% compared to the previous Monday, ending the four consecutive days of decline that occurred between Friday and Monday. Despite this, the rate remains around 3.1%, today marking 3.113%, showing that the Euribor continues to cool down after having seen the best data of the year in August. Therefore, those who renew their mortgages with the September percentage will continue to receive great news, facing a significant reduction in their mortgage payments.
After celebrating in July, with some mortgages seeing reductions exceeding 1,200 euros in their annual reviews, the indicator referenced by most variable-rate mortgages in Spain continued to bring joy in August. Last month started with lows, and the trend continued until the end, leaving a monthly average of 3.166%. Now, with the second daily figure of September, the monthly average stands at 3.093%, which corresponds to the lowest percentage in the last two years and is far from the over 4.1% of September 2023.
How Much Will the Mortgage Decrease with the August Review? In some specific cases, the discount almost reaches 1,000 euros. According to calculations by Rastreator, assuming a 150,000 euro variable-rate mortgage with a 25-year amortization period and a 0.75% spread, the annual savings would be 992.26 euros.
The Biggest Euribor Drop of the Year July and August are usually quiet months for the mortgage market. However, the Euribor hasn’t wanted to rest and has been much more active than expected, stimulating the mortgage market during these dates. The most widely used reference index in Europe to calculate the interest rate paid on a variable-rate mortgage has surprised everyone, registering the biggest drop of the year this month: falling by slightly more than a tenth in July compared to the previous month and recording its lowest value since January 2023 (3.337%).
Specifically, the Euribor is currently at 3.52%, just over a tenth (0.118 points) below June’s figure (3.65%) and also more than six-tenths (0.617 points) below the figure for the same month in 2023 (4.149%). Additionally, over the past few weeks, the indicator has recorded the lowest daily figures of the year, even reaching values around 3.4%.
For example, on Friday, July 26th, it was at 3.426%, on Monday, July 29th, it registered 3.425%, and this past Tuesday, July 30th, it fell even further to 3.406%, the lowest daily value since March 2023. This has led to its largest year-over-year drop in 11 years, since June 2013.
“After a bullish period like the one we experienced last year, the decline we are seeing in the Euribor is logical, especially because the mortgage market is currently in a phase where there is some optimism that the European Central Bank (ECB) will continue to lower interest rates after the summer break, at its September meeting,” analyzes Simone Colombelli, Director of Mortgages at the comparison site and mortgage advisor iAhorro.
However, Colombelli is also cautious and explains that “we are still in a stabilization process, and the real change will begin when the reference index starts to register lower figures than those of two years ago, around 2%; 2023 is not a year that we can use as a reference.”
The Best Mortgages of August Given the situation, the offers highlighted by the comparison site, in a market where banks have not yet started the ‘mortgage war,’ are as follows:
FIXED MORTGAGE: If someone is looking for a fixed-rate loan with an interest rate (TIN) below 3%, they can opt for the one offered by Banco Sabadell. The user can enjoy a TIN of 2.60% and an Annual Percentage Rate (APR) of 3.76% as long as they direct deposit their salary or pension and purchase three insurances (home, life, and payment protection). Banco Santander’s fixed mortgage is along the same lines. Its TIN is also 2.60%, but in this case, more requirements must be met. MIXED MORTGAGE: Sabadell offers one of the most attractive mixed mortgages on the market. For three years, the customer will pay a fixed TIN of 2.10%, and afterward, it will be Euribor +0.70%. All of this requires direct depositing of their salary or pension and purchasing two insurances (home and life). Abanca should not be overlooked. Its mixed mortgage consists of a fixed TIN of 2.50% for the first 5 years, and from the sixth year onward, it becomes Euribor +0.60%. The obligations here include direct depositing of the salary, making 24 purchases per year with the entity’s credit card, and purchasing two insurances (life and home). VARIABLE MORTGAGE: EVO offers a variable mortgage with a TIN of Euribor +0.48% (2.20% during the first two years of the loan) and an APR of 4.28%. In return, it is necessary to direct deposit the salary, unemployment benefit, or pension of more than 600 euros and purchase home insurance. On the other hand, BBVA provides a variable mortgage with a TIN of Euribor +0.60% (1.99% during the first year) and an APR of 5.02%. In return, the user must direct deposit their salary and acquire two insurances (home and loan repayment).
