The 12-month Euribor, the index to which most Spanish mortgages are referenced, will close for the first time in its history at levels close to 0% in November and will lower mortgages by 163 euros per year.
In the absence of a day for the close of the month and with data on November 26, the monthly Euribor is 0.084%. The last daily value was 0.048%, after starting the month at 0.106%.
In this way, a citizen with a mortgage of 120,000 euros to 20 years and Euribor + 1% will get a reduction in their monthly fee of 26 euros or, which is the same, 163 euros per year.
XTB analyst Jaime Díez explained to Europa Press that the index has experienced a 50% drop since the beginning of the month “as a result of the proximity of the European Central Bank meeting” to be held on December 3 and before the ” high expectations “that the market has in the modifications that the president of the issuing institute, Mario Draghi, makes about the current QE.
In this sense, he recalled that of the eight Euribor references to different terms, only two maintain the positive tone – the Euribor to 9 months and the Euribor to 12 months -, placing the first in a “meager” 0.009%.
Díez pointed out that the direction of both references is also to end in negative, but has warned that we will have to wait for the ECB to lower, even more, the interest rate of its deposits at sight, currently located in the – 0.2%.
“The market expects a reduction next week to -0.3%, but Draghi could hint that such facilities may be even lower and that he will again act to sustain his word of raising inflation,” he says.
REDUCTION OF THE MARGINS OF THE BANKING SECTOR
Analyzing the consequences of this fall, the expert has indicated that the advantage of the Euribor being at such low levels allows families and companies to borrow or refinance their debt at more advantageous rates, with the economic benefit that implies, as well as having the possibility of undertaking new investments.
However, this downward trend negatively affects the banking sector, which reduces “even more” its margins. “You can already hear merger campaigns to weather the storm, which seems to be longer than expected and due,” he added.
On the other hand, the low rates also reveal two major problems of the current economy: the fear of financial institutions to lend money to other agents, which causes liquidity “does not go out to many circles”, and the lack of demand of credit.
“Neither companies nor families have completed their deleveraging and have no ability to get back into debt, and new companies are facing low demand, so they do not see the need to make significant investments,” he said.
Diez also stresses that in the case of governments, the current flow of strong austerity and compliance with deficit targets “is contrary to further increases in public debt, so that countries also do not take all the advantage possible to the credit facility that It exists in the market. “
Looking to the future, the analyst predicts that December will be “an uncertain month” for the Euribor, since the ECB could provoke a new acceleration of the falls. However, he anticipates that if Draghi’s message is not all that ‘dovish’ is expected, “a slight rebound could be appreciated after the sharp fall in November”.
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