Euribor Holds Steady Despite January Rise: Experts Predict Continued Downward Trajectory
The Euribor, the benchmark interest rate for mortgages in Spain, dipped slightly in January, signaling a potential pause in its nine-month descent. While the rate closed at 2.524%, up slightly from December, it remains considerably lower than levels a year ago (3.609%) and six months ago (3.526%).
Despite this upward tick, experts remain optimistic about further reductions throughout 2025. Many anticipate a further 0.25% decrease from the European Central Bank (ECB) at its upcoming meeting, potentially setting the stage for continued pressure on Euribor throughout the year.
"Those who have variable mortgages can be calm because their commissions will go down if they have a review in the coming weeks," states Miquel Riera, a mortgage specialist at Helpmycash.com.
Mortgage holders with reviews due in February 2025, even considering the January increase, can anticipate substantial savings. According to Kelisto.es, the average Spanish mortgage holder could save 90.14 euros per month, translating to a yearly reduction of 1,081.68 euros.
These savings vary depending on individual loan factors like amount, amortization period, and origination year. However, Kelisto.es estimates that a 100,000 euro mortgage reviewed in January 2025 could save 58.84 euros per month, while a 200,000 euro mortgage could save 117.69 euros per month.
While recent inflation concerns and protectionist measures from the new US administration could potentially influence the ECB’s policy decisions, experts remain confident about Euribor’s downward trajectory.
"We believe that the logical thing would be to see new descents at the ECB warehouse rate, at least during the first half of the year. This would lead the Euribor to settle in the environment of 2-2.25% by the end of 2025," states Estefanía González, spokesperson for Kelisto.es.
In an interview with Time.news, González elaborated on these predictions:
"While it’s true the Euribor ticked up in January, it’s critically important to remember the broader context. We’ve seen a consistent decline for nine consecutive months, and comparatively, the current rate is considerably lower than it was six months and a year ago."
Gonzalez added: "If the ECB decreases its key rates as anticipated, it will almost certainly put downward pressure on the Euribor. This could pave the way for further decreases throughout the year, potentially bringing the Euribor to the 2-2.25% range by the end of 2025."
She advised borrowers with variable rate mortgages to be optimistic and take advantage of potential upcoming savings.
González concluded by acknowledging concerns about inflation and US policy, but stressed that the ECB’s primary focus remains on curbing inflation and maintaining price stability.