The Euribor next to 2,5 %
26.11.2005
The Euribor to one year, the reference most used in Spain to index-link the mortgage loans of variable type, keeps on mending positions and getting dearer the payment of the housings. In the last October, this index already raised 8,5 % with regard to the previous month (it went on from 2,22 % to 2,41 %). And this month there will take place almost with entire safety another important advance (the Spanish Bank will not confirm the fact until middle of December).
Although the variable that is used like mortgage reference is the medium month's characteristic, last Monday, the 21st, the Euribor marked 2,78 % and it has been moving from the beginning of the month over 2,6 %. Of confirming to him the increase, the mortgage market would confront an increase of the Euribor over 20 % in only two months, being located in levels of three years ago.
Notices
The change of this index means that the financial institutions of the Euro area foresee a stage with higher interest rates in one year (the Euribor is the price of the money in the interbank deals), therefore they are already adding the increases.
The proper president of the European Central Bank, Jean Claude-Trichet, allowed to make out in his last public intervention that the organism is prepared for an increase of the types, with what it will try to brake the inflationary pressures in the Euro area (the oil has raised 40 % in the last year). The increase, which would take place at the beginning of next December, would be of a quarter of point. The experts also believe that during the first trimester of the year another increase of 0,25 points might take place, placing the price of the money in 2,5 %. The levels in which there is moving the Euribor, the highest from January, 2003, move forward precisely this stage.
For Miguel Sebastián, the director of the Economic Office of the Presidency of the Government, the interest rates in Spain have already risen, because the Euribor to one year has grown more than 70 basic points in the last two months, he tells. The increase is already gathered in the Euribor. In Spain, the interest rates, if perhaps, they will go down.
In the opinion of Sebastián, there is no motive of worry of climb of the price of the money for those citizens who have a mortgage loan.
The Consumers' Federation in Action (Facua) has announced that the increase of the interest rates a quarter of point will get dearer the Spanish mortgages in an average for 19 monthly euros (for an average loan for 145.000 euros and a pay-off period of 23 years, with Euribor +0,35 %).
Inequality
If the upturn of the interest rates takes place, the effects in the budget of the Spanish families will change according to the geographical location and the level of income of the hearths. The families of the big cities would be those who would turn out to be more harmed, as aims in a study the General Association of Consumers (ASGECO), by the biggest price of the square meter that registers in these areas.
The organization denounces that you code it officials are national averages that do not reflect the problems that will happen in the most expensive areas when they raise the interest rates. The INE, thinks Asgeco, thinks that the average price of a mortgage in Spain is 134.184 euros, but while in Extremadura the average is 94.120 euros, in the Community of Madrid it is located in 188.844 euros. Asgeco denounces that the upturn of the types will harm more the residents of the most expensive autonomous regions because they will suffer major increases on having applied the new percentage and will have to increase his indebtedness.
Source: The World Housing
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