The Euribor has hit the brakes on its recent slide, closing June at 2.08% – exactly the same as last month, according to provisional data.
The figure confirms what analysts have long suspected: the benchmark is proving stubbornly resistant to dropping below the 2% mark.
That said, homeowners still have reason to breathe a little easier. Mortgage repayments tied to the Euribor are set to fall, despite the stall in its decline.
Geopolitical jitters and growing signals that central banks – particularly the European Central Bank – may be nearing the end of interest rate cuts are putting the brakes on further drops.
‘We’re hitting the floor,’ said Antonio Gallardo, head of research at consumer group Asufin.
‘In normal conditions, we might see the 2% barrier fall over the summer, possibly heading towards 1.8% or 1.9% by year’s end.’
Rates have not been helped by the geopolitical climate, in particular the instability in the Middle East involving the US, Israel and Iran.
Relief for borrowers
Even with the Euribor stuck at 2.08%, monthly mortgage payments are still coming down.
For an average €150,000 mortgage over 25 years, repayments will now fall to around €717 a month, assuming a 1% spread. It’s a saving of roughly €132 for those with mortgages up for annual review.
