Euribor rates continue to rise, but at an increasingly slower pace. Interest rates should continue to rise until the end of the first half of 2023, to then stabilize at a level already lower than the current one. Consult the simulation for your home loan
There seems to be no escape. The Portuguese with home loan contracts that are going to be revised next month should have new bad news, with installments rising significantly as a result of the rise in Euribor rates.
Holders of credit contracts indexed to the 12-month Euribor, those who currently represent the largest share of mortgage loans in Portugal, are the ones who will experience the greatest variation in the installment payable to the bank. Simulations carried out by CNN Portugal, based only on the average value of Euribor rates in the first half of November, show that for these contracts the increase will be greater than 50%.
The rise in the installment happens because the last time these credits were revised was in December of last year based on the Euribor average of November 2021, when the rate still showed a negative value (-0.487%). Today, the reality is very different and in the first half of the month the average 12-month Euribor was already slightly above 2.8%.
The result is a dizzying rise in the installment that can lead to an increase of just over 40 euros per month in a contract where the outstanding capital is only 25 thousand euros. But that in a contract where the loan amount is 150 thousand euros, you can increase the installment by almost 250 euros per month.
How much will the mortgage payment increase?
30-year loan with 1% spread
| 12-MONTH EURIBOR | ||
|
Loan of 25 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
74,94 |
|
|
December 2022 |
116,52 |
41,58 |
|
Loan of 50 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
149,88 |
|
|
December 2022 |
233,04 |
83,16 |
|
Loan of 75 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
224,82 |
|
|
December 2022 |
349,55 |
124,73 |
|
Loan of 100 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
299,76 |
|
|
December 2022 |
466,07 |
166,31 |
|
Loan of 125 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
374,7 |
|
|
December 2022 |
582,59 |
207,89 |
|
Loan of 150 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
449,64 |
|
|
December 2022 |
699,11 |
249,47 |
The rise in installments in December will be smoother for those whose credit is indexed to Euribor for three or six months, but when you analyze what has happened since December of last year, you can see that, despite being smaller, the increase in installments is , still very significant.
For those whose credit is indexed to the 3-month Euribor, the increase varies between just over 17 euros and just over 100 euros, depending on whether the outstanding capital is 25,000 euros or 150,000 euros.
The big difference, however, is that for those who have 3-month Euribor this will be the fourth time that the installment has been revised, making the increase in the monthly installment in the last 12 months already 28 euros in contracts with a debt of 25 thousand euros or almost 170 euros for contracts with a debt of 150 thousand euros. In the end, counting the last 12 months, the increase in the installment almost reaches 40%.
How much will the mortgage payment increase?
30-year loan with 1% spread
| 3-MONTH EURIBOR | ||
| Loan of 25 thousand euros | ||
| installment | Increase | |
| December 2021 | 74,06 | |
| March 2022 | 74,45 | 0,39 |
| June 2022 | 76,05 | 1,6 |
| September 2022 | 85,03 | 8,98 |
| December 2022 | 102,26 | 17,23 |
| increase in one year | 28,2 | |
| Loan of 50 thousand euros | ||
| installment | Increase | |
| December 2021 | 148,13 | |
| March 2022 | 148,89 | 0,76 |
| June 2022 | 152,11 | 3,22 |
| September 2022 | 170,05 | 17,94 |
| December 2022 | 204,52 | 34,47 |
| increase in one year | 56,39 | |
| Loan of 75 thousand euros | ||
| installment | Increase | |
| December 2021 | 222,19 | |
| March 2022 | 223,34 | 1,15 |
| June 2022 | 228,16 | 4,82 |
| September 2022 | 255,08 | 26,92 |
| December 2022 | 306,78 | 51,7 |
| increase in one year | 84,59 | |
| Loan of 100 thousand euros | ||
| installment | Increase | |
| December 2021 | 296,26 | |
| March 2022 | 297,79 | 1,53 |
| June 2022 | 304,22 | 6,43 |
| September 2022 | 340,1 | 35,88 |
| December 2022 | 409,04 | 68,94 |
| increase in one year | 112,78 | |
| Loan of 125 thousand euros | ||
| installment | Increase | |
| December 2021 | 370,32 | |
| March 2022 | 372,24 | 1,92 |
| June 2022 | 380,27 | 8,03 |
| September 2022 | 425,13 | 44,86 |
| December 2022 | 511,3 | 86,17 |
| increase in one year | 140,98 | |
| Loan of 150 thousand euros | ||
| installment | Increase | |
| December 2021 | 444,39 | |
| March 2022 | 446,68 | 2,29 |
| June 2022 | 456,33 | 9,65 |
| September 2022 | 510,16 | 53,83 |
| December 2022 | 613,55 | 103,39 |
| increase in one year | 169,16 | |
The same will happen in contracts that are indexed to the six-month Euribor. The increase in December will not be as significant as the one that occurs with credit indexed to the 12-month Euribor, but because this will already be the second increase this year.
Analyzing the value of the installment in December of last year and the one that should result from the revision in the next month, it appears that the increase could reach an increase of more than 46%.
How much will the mortgage payment increase?
30-year loan with 1% spread
|
6-MONTH EURIBOR |
||
|
Loan of 25 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
74,43 |
|
|
June 2022 |
78,77 |
4,34 |
|
December 2022 |
109,19 |
30,42 |
|
increase in one year |
34,76 |
|
|
Loan of 50 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
148,85 |
|
|
June 2022 |
157,53 |
8,68 |
|
December 2022 |
218,37 |
60,84 |
|
increase in one year |
69,52 |
|
|
Loan of 75 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
223,28 |
|
|
June 2022 |
236,3 |
13,02 |
|
December 2022 |
327,56 |
91,26 |
|
increase in one year |
104,28 |
|
|
Loan of 100 thousand euros |
||
|
installment |
Increase |
|
|
December 2021 |
297,7 |
|
|
June 2022 |
315,07 |
17,37 |
|
December 2022 |
436,74 |
121,67 |
|
increase in one year |
139,04 |
|
|
Loan of 125 thousand euros |
||
|
paid |
Increase |
|
|
December 2021 |
372,13 |
|
|
June 2022 |
393,83 |
21,7 |
|
December 2022 |
545,93 |
152,1 |
|
increase in one year |
173,8 |
|
|
Loan of 150 thousand euros |
||
|
paid |
Increase |
|
|
December 2021 |
446,55 |
|
|
June 2022 |
472,6 |
26,05 |
|
December 2022 |
655,12 |
182,52 |
|
increase in one year |
208,57 |
|
Interest rate rise slows down and light is seen at the end of the tunnel
Euribor rates have risen practically since the beginning of the year for all maturities and it has also been seen that, from month to month, this rise has been greater. That is, rates not only rose, but the rise accelerated.
Apparently, although the rise is maintained, there is now a deceleration. From September to October, rates rise again, but at a slower pace, and in November, only accounting for the first fifteen days, there is an increase again, but again at a slower pace.
Is there a light at the end of the tunnel?
Filipe Garcia, economist at IMF – Information for Financial Markets, stresses that “the market has been convinced for a long time that interest rate hikes [do Banco Central Europeu (BCE)] will end in the first half of 2023” and that, “a few weeks ago”, the perception was that the reference rate would rise to a maximum of 3.25%, and at this time this expectation was revised downwards to values between 2 ,75% and 3%, as a probable ceiling between May and June.” That is, the ECB’s reference rate will continue to increase beyond the current 2%, but the ‘jumbo’ increases, as the rises of 0 became known .75 percentage points decided by the ECB, seem far away.
An idea that meets the statements made this Tuesday by the governor of the Bank of France, François Villeroy de Galhau, in Japan, during a conference. “Beyond this level, we will probably continue to raise rates, but we will be able to do so in a more flexible way and possibly less quickly. ‘Jumbo’ rate increases will not become a new habit”, he stressed in statements quoted by Reuters.
And in this scenario, Filipe Garcia recalls that, for example, “with regard to the six-month Euribor, the market projects a maximum value between 3.05% and 3.1% in about half a year”, that is, a value which compares with the 2.78% recorded in the first half of November.
In other words, concludes Filipe Garcia, as a result of expectations “that central banks may start to be less aggressive in their cycle of rate hikes”, everything points to an increase in the 6-month Euribor to above 3% at the beginning of next year. half, before starting to retreat in the second half of the year, culminating in a period of stabilization between 2.5% and 2.75% over the next five years”.
