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It was already expected, but it is still a milestone for those who have residential credit. Euribor at six, the most used in the current group of credits, reached a positive value of 0.009% on Monday, A turning point that occurs after nearly seven years of negative value accumulation. The direct result of the development of this, for three months and 12 months, is the gradual rise in credit installments, in an unfavorable context for families, given the rise in prices of most goods and services.
It is indicated that the six-month Euribor, which is in about 600 thousand contracts, fell to -0.554% in December 2021, following the steps of the 12-month Euribor, which has been positive since April. The longer range of these rates, widely used in the latest housing loans, has already accumulated, in just two months, an estimate of nearly half a percentage point, set today at 0.521%.
The three-month rate, found in about a third of current credit contracts, is also rising, having already canceled more than half of the maximum negative value recorded in the last period of last year (-0.605%). This Monday, the value was fixed at 0.314%, and the market expected, translated by the price of the futures contract, that it would assume a positive value until the end of July.
This is not good news, but the price advance is sure to continue in the coming months, In anticipation of the next monetary policy decisions of the European Central Bank, which is expected to increase prices in July. After several statements by European Central Bank President Christine Lagarde and senior central bank officials, the question now is whether a decision on a 25 basis point or 50 point increase will be taken at next month’s meeting, given the rising inflation in the eurozone countries.
The new Euribor values apply immediately to new loans that will be contracted in July and also to contracts that will be reviewed in that month, always using the monthly average of the previous month, in this case, June.
However, the new values will also gradually reach all loans linked to these variable rates, which are 93.3% of about 1.45 million contracts outstanding in Portugal, increasing the premiums payable to the bank. Loans are reviewed every three, six and 12 months, depending on the term of the rate used.
Only contracted loans flat rate It is not subject to any update during the specified period, but it represents only 1.2% of the current contracts at the end of 2020, away from the 93.3% linked to Euribor prices. Mixed contracts (initial period at fixed rate and then at variable rate), amounting to 5.5% of the total.
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