The European Central Bank (ECB) has moderated the increase in interest rates, but has increased the intensity of talk about it Other “big” hikes in the near future The direct result was a longer-term “jump” for Euribor, to which most family home loans are linked. A more significant increase in interest rates should “force” more families to request contract renegotiation in order to reduce premiums.
In this Friday session, the 12-month rate rose by 0.126 points to 2.993%, very close to 3%, and a new maximum since January 2009. The six-month rate also rose another 0.076 point to a maximum of 2.569%. Almost 14 years old.
Only the three-month Euribor, which has risen more in recent weeks, fell slightly (0.015 points), to 2.047%, having set a new maximum since February 2009 two days ago. In recent weeks, the gap to the long-term should narrow fairly quickly.
Confirmation that the slight correction in the three-month Euribor is irrelevant is the behavior of the futures market, where shortly after the statements of the European Central Bank President Christine Lagarde, the immediate movement was bullish.
This financial instrument is not directly applied to housing contracts, but it predicts the expected development, and the March 2023 contract showed a value of 2.995% at the beginning of Friday morning and the June contract is already above 3.3%. Two days ago, the expectation was that Euribor for a period of three months, which is the only one for which this financial instrument exists, It did not reach 3% throughout 2023although it was very close to this value.
In housing contracts, the monthly average of Euribor rates, set on the interbank market, is used based on the rates at which a group of banks are available to lend money to each other. And these rates closely follow, at this moment above, ECB decisions.
A more significant increase in Euribor rates will worsen the provision of housing loans in the coming months, as they are revised, and will make it more difficult to access new credit for this purpose.
The contracts that will be reviewed in the coming months, especially those related to the 12-month Euribor, will suffer very sharp increases. This is because recent reviews were still rated negative.
A higher-than-expected rise in Euribor rates, to which around 90% of existing home loans in Portugal are linked, could prompt more families to request contract renegotiations, according to Plan of action to prevent non-compliance (PARI)recently improved, or repay the principal if you have savings.
as expected, The rise was in reference rates 0.5 percentage point, down from 0.75 percentage point for September and October, but rhetoric on concerns about inflation was significantly tougher.
“Not only will we raise interest rates, but today we also decided that they still have to rise significantly and regularly,” said Christine Lagarde, admitting that they could “raise interest rates by 0.5 percentage points.” [em cada reunião] For a long time “.
The European Central Bank’s refinancing rate (the rate that provides liquidity to commercial banks) is now at 2.5% and the deposit rate (the rate at which banks pay deposits with the European Central Bank) is at 2%.
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