Mortgage rates in Spain could soon see a drop in good news for homeowners 

VARIABLE rate mortgage rates could soon fall, as the one-year Euribor, the most widely used indicator in Spain to calculate figures, stood at 3.503% on Wednesday.

That’s the lowest level since March 2023, with experts believing further drops are coming soon, which will work their way to mortgage rate cuts.

After five consecutive months of decline, the Euribor average for July fell to 3.57%.

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This week’s Euribor rate is at the lowest level of the year.

In June, the Euribor marked an average rate of 3.65% with the indicator starting the year at 3.609% (January average) to rise to 3.671% in February and 3.718% in March.

From that moment on, it started a downward path amidst forecasts of interest rate cuts in Europe.

It fell to 3.703% in April and stood at 3.680% in May.

If the Euribor closes July at around 3.57%, the payments of variable-rate mortgages that are reviewed annually would be cheaper, since in July 2023 it was at 4.149%.

Similarly, the average rate for July will likely be below that recorded six months ago- namely 3.609% in January.

Last month, the European Central Bank(ECB) cut interest rates for the first time since March 2016 in a move welcomed by investors and mortgage holders.

The rate fell by 0.25 points to stand at 4.25%, with the ECB keeping its options open over its next cut- depending on how well the fight against inflation is progressing.

There was no surprise on Thursday when the ECB’s monthly meeting kept the rate at 4.25%.