Euribor closes on October 31, 2024 with the biggest drop in mortgage repayments since 2009. The average is 2.691%marking the largest monthly difference in the last fifteen years compared to the same month last year, a real joy for mortgage creditors who await the review of their deadlines. It does this with a very slight drop of 0.001 basis points in daily data, marking 2.547%, enough to consolidate a new annual minimum on the last day of October.
October was a month in which, gradually, the declines in the index consolidated. Although there have been specific increases in daily data, such as last Wednesday where it increased by 0.052 points, the downward trend of Euribor is confirmed for another month, in which This is already the seventh consecutive downward close.
Even if it was not acquired at the start of the month, the average for the month of October ultimately remains below the barrier of 2.7, since it stands at the final figure of 2.691%. This means 0.245 basis points less than in September.
Additionally, those with variable rate mortgages that are awaiting review (reviews every 12 months) will see the biggest drop in their payments in 15 years. Because? Because the figure from a year ago was the highest in the bullish streak (4.16% in October 2023), while The 2024 figure is the lowest of the bearish streak (2.691%).
In fact, to see a closing with a lower figure than the current one, you have to go back to November 2022. With all that, theThe decline is 1,469 basis points compared to the month of October 2024, which directly influences the quotas with periodic reviews every 12 months.
How does this impact my mortgage?
This downward trend experienced by the Euribor directly affects mortgage reviewsboth semi-annual and 12-month, since banks recalculate variable mortgages with the monthly average, up or down compared to data from six or twelve months ago.
To see it with an example, for a real estate loan of 140,000 euros over 30 years (360 months), with a differential of 1% and taking the month of October 2023 as a reference (since most real estate loans are revised at 12 months), when the Euribor closed at 4.16%, The monthly fee was 765.30 euros.
From now on, with the provisional average for October 2024, which amounts to 2.691%, the mortgage payment of owners who have a revision in September will drop to 612.84which means that They will pay 152.46 euros less than a year ago and the first reductions in monthly mortgage payments will begin to be felt.
What will happen to Euribor until the end of the year?
To put the current evolution of the Euribor in context and predict what will happen until the end of the year with futures contracts, we must take into account the latest movements of the European Central Bank (ECB). , which further lowered interest rates by 25 bases. points, with a deposit rate remaining at 3.25%.
This is good news for mortgage creditors, since it seems that the evolution of Euribor, which directly depends on rates, will continue to decline for the rest of the year. In fact, the market, experts and Euribor itself are convinced that the fall in rates will not stop in the coming months. At least until the summer, it is clear that the ECB will make reductions per meeting, although it is also true that it already sees the end of the cuts.
Concretely, the end of cutting ranges around December 2025, when Euribor is expected to reach its lowest level, falling. This downtrend may seem a bit counterintuitive, however, given the latest updated data on mortgage index futures.
What happened? Although at the beginning of October three-month Euribor futures forecast a figure below 2% in December 2025, this figure increased after the close of October, since it currently stands at 2.1%.
How is Euribor calculated?
Euribor is called the European InterBank Offered Rate and is calculated by a panel of European banks which report every day at what rate interbank loans are granted. Since 2020, calculations have been carried out in a hybrid manner. Panel data is included, but also the market’s own estimates, with the aim of reducing volatility and manipulation risks, to which these indices were subjected at the beginning of the century.
The panel is made up of 18 European banksincluding Santander, BBVA, Barclays, Deutsche Bank and Unicredit.
Every working day at eleven o’clock in the morning, the average interest rate at which financial institutions lend capital is published. one week, one month, three months, six months and 12 months.
