The Euribor rises to 2.95% in August and makes mortgages more expensive

The Euribor, the indicator most used in Spain to review variable mortgages, rises again in August and the monthly average will close this Monday at 2.95%.

The rate increases for the second consecutive month, after having fallen slightly in June, thus maintaining the upward streak that has been accumulating since August of last year. The market began to assume that the European Central Bank (ECB) would raise interest rates to prevent inflation from getting out of control in the Eurozone and hitting an economy that, as a whole, continued to show clear signs of weakness. High inflation impoverishes families and makes companies less competitive.

The Euribor acts as a thermometer and the fact that it rises in August indicates that the ECB will raise rates again one or two more times until the end of the year. Analysts point to an increase in September and do not rule out another one just before the end of the year. The reason is that inflation remains uncontained due to the rise in energy prices caused by the war in the Middle East, which still has no expiration date.

With this rise in the Euribor, families who have to annually review an average mortgage of 150,000 euros for 25 years with a differential of one point, will pay about 68 euros more per month and 810 euros more per year. In the case of mortgage loans of 300,000 euros that maintain these same conditions, the increase will be 135 euros per month and around 1,620 euros per year. In the case of a mortgage loan of 150,000 euros that takes the August Euribor as a reference to review semiannually, the fee will increase by around 59 euros per month and more than 350 euros per semester.

HelpMyCash analyst Miquel Riera points out that the increase in the index in August suggests that the organization led by Christine Lagarde "could raise its rates at least two more times before the end of the year: once in September and another probably in December." September, according to Riera, is practically taken for granted; while inflation in the eurozone is at 2.9% (the latest data available is from July), far from the 2% that the ECB has as its medium-term objective. If Iran and the United States reach a peace agreement before the end of the year, "there is the possibility that prices will moderate and that this increase in interest will not be necessary," adds the expert.

"The Euribor arrives at the September meeting having done a good part of the work in advance. With a rise of 25 basis points as the most likely option, the market will not only be interested in whether the ECB rises, but in how many increases it believes may be left afterward," adds Pablo Vega, financial expert at Roams. From their point of view, this will probably be the true catalyst to know if 3% acts as a consolidation zone or as a starting point for new increases in the Euribor.