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Newsletter (Jan 2023): Will the Euribor continue to rise?

At the time of writing, our enquiries so far this month are already on track for 41% growth compared to Q4’s monthly average. And while there is still uncertainty in the global markets and we’re in a period of rising interest rates and high inflation, we are finding that clients are not letting this stop them buy their dream home in Spain. 

Currently, 47% of our sign-ups are buying for holiday use, 35% for investment and 18% as their main residence. Although this is just a snapshot of the market, it’s encouraging that over a third of our clients are investors, going against many predictions made in Q4 last year by industry experts.

So, what are the rates right now and will the Euribor continue to rise? 

Despite the rise in the Euribor, rates are still very attractive compared with historic highs (see graph below). Full term fixed rates are still possible depending on the client’s profile. For a standard profile, we are offering a 2-year fixed rate from 2.5% and a variable rate from Euribor + 1.53%. The 12 monthly Euribor is currently 2.84% giving a variable rate of 4.37%.

Illustrating rise in the Euribor and that rates are still very attractive compared with historic high in the Spanish mortgage market.
Despite the rise in the Euribor, rates are still very attractive compared with historic high

In terms of what the future holds, we feel the Euribor will stabilise in Q3 (assuming inflationary pressures are under control) and possibly start reducing again in Q4/Q1 2024. Some analysts predict that following a further 0.5% increase in the Euribor it will stabilise between 2 – 3% in the coming years. This probably explains why a 2-year fixed rate is attractive right now. We certainly don’t see the recent market adjustments significantly affecting the Spanish property market.

Our February newsletter will include a market update based on our complete figures for 2022, although one point we can already confirm is that company revenue grew in 2022 by 60% and by 54% in Q4 compared to Q4 2021. British, Dutch & American buyers continue to be our most popular clients. 

Katherine Walkerdine Founding Partner / Business Developer BA (Hons),Cert PFS,Cert CII (MP)

Living in Spain since founding Mortgage Direct in 2006. Prior to that, she had her own practice in London for fifteen years advising high-net-worth clients on their investment and taxation planning. An array of UK and Spanish qualifications.

Mortgages taken out in currencies other than the currency in which you earn are considered Foreign Currency Mortgages. Changes in the exchange rate may therefore increase the equivalent value of your debt. Under the Mortgage Law 5/2019 banks in Spain have introduced mechanisms to protect consumers from exchange-rate risk. For more information, please speak to your broker.

Mortgage Direct, S.L. is a company registered in the Registro de Intermediarios de Crédito Inmobiliario del BdE with the nº D108.

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