For those with a home loan tied to Euribor, the damn day has come: the 12-month period is already on positive ground, I set this Tuesday at 0.005%, after six years of accumulating negative values, and more specifically since April 5, 2016.
Within 12 months, Euribor price reached an all-time low of -0.518% on December 20, 2021. At the beginning of this year, Market expectations were still that this rate could remain above zero near the end of 2022a scenario that has just been highly anticipated, and which is bad news for thousands of families, in an unfavorable environment due to higher prices.
Three-month and six-month rates are also recovering, making interest charges more expensive, but they are still in negative territory.
The six-month interest rate, the most used in housing loans, rose this Tuesday to -0.320%, up 0.014 points from Monday and the new maximum since August 2020, already at a distance from the minimum. -0.554%, Also Verified Dec 20, 2021.
The same trend was observed in the price of Euribor for three months, which rose to -0.433%, in addition to 0.002 points and the new maximum since August 2020, against the usual minimum of -0.605%, which was verified on December 14, 2021.
Especially within 12 months, Euribor is taking real leaps, such as 35 basis points on Tuesday, which was explained by strong market expectations that the European Central Bank (ECB) will have to review its monetary policy very soon to control rampant inflation. In March, in the eurozone, Year-on-year inflation was 7.5%.reflecting rising prices for energy, raw materials and other goods, a development exacerbated by the war in Ukraine, with no end in sight.
The European Central Bank was cautious about what steps to take, starting with anticipating an end to debt purchases, but assumed, at its March meeting, that it might make other options, including Provide the date when interest rates will start to rise.
Euribor’s sharp 12-month rally came after recent comments by James Bullard, president of the Federal Reserve in St. Lewis, who acknowledged the potential need to raise US interest rates by 300 basis points.
Gradual increase in benefits
Unlike until December 2021, when rates set their lowest ever values, the recent development in Euribor will exacerbate new loans and, gradually, existing loans tied to these variable rates.
So far, negative values for Euribor have been reduced to diffuse Or the bank’s trade margin, so they drastically lowered their interest charges. In case diffuse Up to 0.5% and 0.6%, the negative value of Euribor allowed full interest payments to be canceled or, to a lesser extent, forced banks to return interest to customers.
In loans tied to the three-month Euribor, which has been in negative territory for seven years, the contracts are also reviewed every three months. In other words, the revised ones will be implemented in May with a monthly average price for three months of April, which should remain negative for a few more months, but will already be slightly higher than the rate used in the past reviewed in January (with an average of December).
The same will happen with the revision of the contract linked to the six-month period due to be implemented in May, which was last revised in November, at an average of this rate for the previous month, i.e. October 2021, the period in which was slightly lower.
And 12-month contracts, the term broadly used in loans contracted in the past decade, as they are the highest, also don’t escape a slight positive difference, given that the sharp rise in that term should put it well above the April 2021 value. .
Housing contracts made at fixed prices that do not change during contract periods, But the weight of this variant is relatively low in Portugal.
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