The Euribor rise, which is the indicator that most Spanish mortgages are based on, could seriously impact homeowners' pockets. CaixaBank Research data shows that Spanish households spend 33.4% on their total income for mortgage payments. The firm's forecasts on the development of housing prices, gross income, and mortgage rates suggest that the mortgage effort could rise by approximately 3.2 percentage points over the next two years to reach 36.6% by 2023, according to its estimates.
Although the ratio is not at the maximum of 54.6% in the financial crisis, it suggests a significant increase that could be even worse, as high as 39.2%. This is based on implicit interest rates, which can be seen below. These indicate a rise of the 12-month Euribor from 1.06% to 2% this year to 1.25% at the end.
The indicator's provisional average for May is currently at 0.2285%. This is despite the recent rebound and only two sessions remaining before the month ends. A 20-year mortgage for 150,000 euros, with a 1% Euribor differential and an annual review would see a 50 euro monthly increase in its monthly installment if it closes at these levels. This is 600 euros per year.
The experts urge calm, and to remember that all families will be impacted by this escalation. This is especially due to the recent surge in fixed-rate mortgages which account for 73% more loans than variable ones. This would allow the rate increase to have a smaller impact on homes with recently mortgaged properties.