The Euribor will rise in September while mortgages fall.

According to the data of the market gathered by EFE, the average monthly rate of this indicator is higher than the 0,542% of August, but is lower than the 0,740% reached in September 2012, which will determine the reduction of the installments of these credits.

So that, once the Bank of Spain confirms the Euribor of September, an average mortgage of around 150.000 Euros with a period of 25 years will experience a reduction of 13 Euros per month or 156 per year.

In the case of a mortgage of 300.000 Euros, also with a period of 25 years, the monthly savings will reach 26 Euros or 312 per year.

However, the reduction of the indicator does not always mean a reduction of the mortgages, as some of them are bound by the so called “minimum level clauses”, which establish minimum interest rates that prevent them from benefitting from any reductions in the rate. (…)

The last decision of the ECB will limit the rise of Euribor at 12 months.

The Euribor at 12 months, the main indicator for mortgages at one year, will close this month with a rise up to 0,524%. However, it looks like it will see a limitation to any rises after the last decision of the ECB.

In the last meeting of the ECB, Mario Draghi, its president, announced that the interest rates “will continue at its current levels or at lower ones during a longer time”. It also added that “50 basic points (current level of the rate) is not the limit”.

However, the euribor at 12 months has risen during this month of July due to a reduction of the expectation of a fall of the interest rates in view of the calm in the peripheral countries.

In any case, this mortgage indicator will close this month at 0,524%, from the 0,507 in June, experiencing its second month of increases. This means a reduction of 0,537 points from July 2012. (…)

Those experts consulted by indicate that the rises of euribor will be stopped by Draghi´s words. (…)

The Euribor closes a month below 0,5% for the first time in history.

(…) The reduction of the rates alleviated the tensions within the market and unleashed another wave of historic levels. The inter-bank market relaxed and the euribor at 12 months decreased, reaching 0,493%, below the previous 0,51%.

(…) this is the third consecutive month with descents of the Euribor, whose rate, 0,484%, is 0,782 points lower than in May 2012. (…)

Source: Expansión

The Euribor resumes its historic minimum levels… and could continue falling.

No one thought two months ago that the Euribor could drop even more than in December. But finally this mortgage rate has broken the mould in order to close March at 0,54%, its lowest level in history. And the most important thing is that the discounts these descents could cause on mortgages might continue in the next few months.

The Euribor at 12 months, the mortgage indicator to which most mortgages in Spain refer to, has caused more happiness to all holders of mortgages saying good bye to the month of March at its lowest level in history, 0,54%. (…)

Source: Expansión

The Supreme Court declares the nullity of the minimum rate clauses when there is “a lack of transparency”.

The First Chamber of the Court has given its decision after meeting in a session on the partial acceptance of an appeal of cassation based on these mortgage clauses, as informed by Europa Press. The minimum rate of these mortgages implies that the client will always pay a minimum interest rate, apart from the value of Euribor.

If, for example, the client has taken out a mortgage with a variable interest rate of Euribor+2%, but has a minimum rate clause of 3%, he will never pay less than this percentage, even if the Euribor decreases below 1%.

The decision of the Supreme Court, nevertheless, has some nuances. The Court has clarified that its decision does not entail the return of the amounts that have been already paid by customers. The minimum rate clauses are only considered abusive if there is a lack of transparency when marketing the mortgage.

Source: Expansión

The Euribor consolidates its downward tendency while the ECB meets.

The Euribor at 12 months, the main rate used for the calculation of mortgages that have not a “minimum rate clause” in Spain, consolidates the downward tendency resumed in February, after a start of the year with constant increases.

With five values within the month of March, the Euribor reduces its monthly rate to 0,54%, which would mean a descent of 0,96% from March 2012. Plus, this rate has decreased 79 thousandth since the last meeting of the ECB on the 7th February.

The tendency during the month of February has been completely opposite to the one started in January. These last decreases have left the rate at the same levels as in December 2012.

This downward behavior takes place during the meeting of the Government Council of the European Central Bank (ECB), even though no changes on the official price of money are expected, which remains at a historic minimum of 0,75% since halfway last year.

Therefore, this downward tendency of the Euribor is not in line with the evolution of the interest rates, as no downward movements are expected for those.

It is expected that the institution presided over by Mario Draghi reduces its quarterly forecast of the GDP and the Consumer Price Index. (…)

Source: Expansión